Analyst Upgrade on Disney in Anticipation of Disney+

Walt Disney (NYSE: DIS) shares rose higher by 1.74% on Tuesday afternoon after Cowen analysts upgraded the stock, citing its new streaming service and the next release of the “Star Wars” series, according to CNBC.

Cowen analysts upgraded Disney to outperform from market perform and raised its 12-month price target to USD 131 per share from USD 102.

“We view Disney’s catalyst path for the next year as highly attractive, and believe Thursday’s investor day will likely be a deck-clearing event for sentiment,” Cowen’s Doug Creutz said in a note.

“Disney has a very powerful pipeline of product that will play out over the balance of the year,” continued Creutz. “On the film side, we believe Disney’s slate could drive a USD 3 Billion calendar year Studio operating profit. We also believe the slate, principally the Q4:C19 releases Frozen 2 and Star Wars Episode IX, should set the stage for a re-acceleration in Consumer Products performance in 2020.”

Investors are anticipating Disney’s investor day on Thursday where the Company is expected to provide details on its new streaming service, Disney+. Disney+ will rival against other major streaming service providers such as Netflix (NASDAQ: NFLX) and Amazon (NASDAQ: AMZN). Disney’s platform will offer content from production studios such as Marvel, Pixar, and National Geographic.

In addition to Disney+, Disney also owns other streaming services such as Hulu and ESPN Plus. Hulu predominately offers users TV-based streamed content, while ESPN Plus will focus more on sports.

“We believe the Disney+ DTC (direct to consumer) service is well positioned to have an extremely strong launch that surpasses consensus subscriber expectations,” Cowen said. “With the upcoming analyst day likely to provide a needed number reset (for near-term Fox deal dilution and DTC costs), investor focus can shift to this positive catalyst path, and dreams of Netflix-like valuations for the DTC business in years to come.”

Disney rapidly expanded its media collection offerings with the USD 71.3 Billion acquisition of 21st Century Fox. Disney originally intended to acquire Fox for USD 52.4 Billion before a bidding war arose between the Company and Comcast (NASDAQ: CMCSA).

The acquisition of Fox gives Disney direct ownership and rights to popular content such as the Avatar, Fantastic Four, the X-Men, and Deadpool. The acquisition also bolstered Disney’s stake in Hulu from 30% to 60%, giving the Company majority ownership.

2 Comments
  1. Adam Smith 3 months ago
    Reply

    $DIS – shares are strong today ahead of their much-anticipated Investor Day on Thursday. Nice move to the upside over the last 2 weeks!

  2. Nico Padron 3 months ago
    Reply

    Bull flag on hourly Need to break above $120, for a new 6 month candle breakout ! Come on and puuump it if you fail right now $SPY im gonna be very very angwy

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