Disney Stocks Jump 11% After Streaming News

The Walt Disney Company saw a pretty nice gain Wednesday morning, as their stocks rose 11% after two upgrades from Wall Street analysts, in result from yesterdays streaming news during their earnings call.

According to Deadline, Disney’s shares were at nearly $130, which is their highest since February, the trading volume was at twice its usual level.

While Disney had some pretty bleak news resulting in over $3 billion in losses from its theme parks, and more erosion in pay-TV, Disney+ was their bright spot, Disney CEO Bob Chapek revealed that the streamer is at 60.5 million subscribers, the company projected to be at 70-80 million by 2024. With films like Phineas and Ferb: Candace Against The Universe, Magic Camp, The One and Only Ivan, and the announcement of Mulan hitting the service for a $30 premium, the streamer could easily hit the 2024 projected subscriber base by October.

Read: Disney+ Coming To Latin America In November

Doug Mitchelson of Credit Suisse boosted shares to “outperform” from “neutral,” raising his 12-month price target to $146 from $116. In a note to clients, he wrote that Disney is now “even more aggressively positioned as a streaming growth story (where investors have limited investment vehicles), and eventual COVID recovery play.”

Guggenheim’s Michael Morris issued an upgrade to “buy,” lifting his price target to $140 from $123.

Chapek and his colleagues, Morris wrote, delivered a “focused message of boldly pursuing additional global streaming video opportunities by leveraging Star and Disney+ assets and a premium VOD window. While numerous uncertainties around COVID-related pressures on parks and theaters and cord-cutting pressure on media nets remain, the announcement of an upcoming investor day” is another tonic.

Chapek didn’t give a date, but said the event in the next few months would offer a “full update” on the company’s revised road map.

Todd Juenger of Bernstein Research, raised his price target to $116 but maintained his neutral rating on the shares. In a research note, he wrote, “We understand the theory. It’s a chance to re-play the 2019 playbook. Announce a new DTC. Hold an investor day. Announce 5-year sub, ARPU, and profitability target. Collect a ‘Netflix revenue multiple’ against that guidance priced into the stock.”

Juenger continued, “Before we get too carried away, hold on, this is not quite the same. Disney/Fox TV content is not consumer-distinguished in the same way as the Disney+ brands. There will be sizable required investments, we believe the biggest of which will be, once again, foregone licensing. Not to mention accelerated decline of international linear channels,” which produced a $5 billion writeoff in the quarter.

Michael Nathanson of MoffettNathanson, is also neutral on Disney stock but raised his price target $7 to $118. Like Juenger, he labeled the Star announcement a “surprise,” explaining in a note to clients that his assumption was that “the financial pain of this current crisis would make Disney more conservative in the near-term.”

Because competing in streaming requires a stream of pricey new programming, Nathanson added, “We assumed that Disney would maybe add some new, edgier content to Disney+ to drive up the perceived value of that service.”

Investors looking to time their buys of Disney ahead of the next investor day could see a windfall, as many did in 2019. “We would not be surprised to see the stock grind higher as anticipation builds,” Nathanson wrote.

Source: Deadline

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In 2013, Skyler Shuler wanted to share his knowledge of Disney films and the magic behind the scenes. So, he created the Instagram account Disney Film Facts and the page quickly garnered a following. Soon after a Twitter was created, and not long after that DisneyFilmFacts.com was born. The page has been lucky enough to garner a wonderful following of such amazing Disney and movie fans, as well as been sourced in some of the biggest entertainment sites in the world. In 2018, the page was rebranded to The DisInsider, and the rest was history!

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