In the continuing battle between Florida Governor Ron DeSantis and the Walt Disney Co. (NYSE: DIS), DeSantis and the state legislature recently passed a law giving the state control of any expansion plans Disney may have in Florida.

The new law was passed just a week after Disney sued DeSantis and the state late last month, accusing DeSantis of launching a “targeted campaign of government retaliation” against Disney “as punishment for Disney’s protected [right of free] speech [and] now threatens Disney’s business operations, jeopardizes its economic future in the region, and violates its constitutional rights.” On Monday, Disney amended its lawsuit, accusing the governor and the state of “weaponizing the power of government to punish private business.”

The legal confrontation burns a lot of pixels, but what matters more for investors is whether Disney and CEO Robert Iger are going to stop a share price decline that began in November 2021 and has shaved more than 40% from the share price. The signs are not encouraging so far.

After Disney reported first fiscal quarter earnings in February, analysts promptly raised their sales and earnings per share (EPS) estimates for the company’s full year. The company’s performance had less to do with that increase than Iger’s November reappointment as CEO. Disney’s share price did not track the higher estimates, and, in fact, shareholder returns have dropped by nearly 8% since the company’s last earnings report.

So far, Iger’s big contribution appears to be last month’s announcement that he is eliminating some 7,000 jobs, less than 4% of the company’s total headcount of around 188,000. On Monday, Disney announced that it is eliminating reservation requirements at its Florida parks and reinstating dining plans for guests staying at its resort hotels. Both changes take effect in January 2024.

That’s tinkering around the edges. The big issues are losses in the streaming business and falling affiliate fees for its Disney, ESPN and ABC networks. Does Iger have a plan? Will he reveal it when Disney reports quarterly results after markets close on Wednesday?

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Analysts are more optimistic than shareholders. Of 32 brokerages covering Disney, 26 have a Buy or Strong Buy rating. At a median price target of $130.00, the upside potential at Monday’s closing price of around $103.00 is 25.1%. At the high price target of $177, the upside potential is 45.6%.

Second-quarter fiscal 2023 revenue is forecast at $21.8 billion, which would be down 7.3% from first-quarter actual and up 9.5% year over year. Adjusted EPS are pegged at $0.94, down 5.2% sequentially and by 13.0% year over year. For the fiscal year ending in September, analysts expect Disney to report EPS of $4.11, up 16.3%, on sales of $90.1 billion, up 8.9%.

Since announcing first-quarter results, analysts’ consensus EPS estimate has come down by $0.10 to $4.35 (about 2.2%) for the next 12 months, and the share price has declined by 4%. The consensus revenue estimate for the next 12 months has declined by just 0.02% since early February, compared with the same share price decline of 4%. Disney really is the Magic Kingdom, at least for sell-side analysts.

Disney stock closed at $102.97 on Monday and traded up about 2.4% in Tuesday’s premarket session. The stock’s 52-week trading range is $84.7 to $126.48. The company does not pay a dividend.

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