As shares of media giant Walt Disney Co. (DIS) sink more than 6.5% year-to-date (YTD) versus the S&P 500’s 14% rally over the same period, a top media analyst on the Street remains upbeat that the firm will continue to evolve its business throughout an industry transition to streaming and direct-to-consumer models.

In a recent interview with CNBC, Morgan Stanley managing director Ben Swinburne suggests that while investors have been frustrated with Disney’s declining sports unit, “people need to remember that ESPN is probably down to roughly a quarter of the company’s overall operating income.”

He notes that Disney’s film and consumer products businesses, along with all of the licensing revenue that comes out of them, are larger that ESPN. Further, the managing director indicates that the sheer value of the Disney brand, often underestimated by investors, can help drive long-term cash flow despite a clear transition away from traditional TV to on-demand streaming. (See also: Disney Will Need 32M Subscribers to Beat Netflix.)

Film, Licensing Overshadows Flat Sports Segment

Over the last three or four years, acquisitions of Marvel and Lucasfilm have caused Disney’s film and licensing businesses to take off, said Swinburne, highlighting Disney’s organically created "Frozen" franchise, which became a “monster financial hit.” At the same time, Swinburne acknowledges that it’s important to recognize ESPN’s declining operating income, although “the future is brighter than recent past.” He sees upside in Disney’s successful renewal of a deal with No. 4 cable operator Altice, its first big distributor renewal of the upcoming cycle.

While Swinburne expects ESPN to grow operating income, he admits “it’s not the business it used to be.” Disney is well aware of the pressures on traditional TV bundles, and while there is no easy cure, the analyst foresees growth ahead, noting Disney’s pricing power and advertisers’ continued interest in the sports segment. He expects Disney to benefit from major films coming up, indicating that while the next Star Wars film is expected to be a hit, the new Thor movie looks like it could be a surprise cash cow as well.

With fragmentation in television continuing to accelerate alongside the booming global popularity of platforms such as Netflix Inc. (NFLX), Swinburne says it’s surprising that ESPN has even been able to stay flat over the years. Due to the number of choices on the market, ESPN’s stagnant growth could be the new normal, concluded the Morgan Stanley analyst. (See also: Disney Is Best Media Stock Despite ESPN: RBC.)