The assignment with closing price. Disney stocks rose 4.4% on Thursday, with a record high closing price of $ 141.74, after a Wall Street analyst increased its target for the company on increased optimism about the company's streaming prospects.
Benjamin Swinburne from Morgan Stanley, in a note to clients, said he now predicts that Disney will reach more than 130 million global subscribers by 2024 across its three streaming services, Disney +, ESPN + and Hulu. The analyst sees Disney +, launching in November, accounting for 70 million of the total, which is within the range of 60 million to 90 million that Disney has projected.
Last year, Disney said it took full operational control over Hulu and buying minority stake Comcast in a multi-year event. The company has talked about packing the three services, but has not yet revealed any of these bundle details.
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"Our willingness to submit to these higher DTC estimates comes from 1) a faster than expected global launch, 2) more IP gathered faster than expected, and 3) a plan to exploit third-party distribution," Swinburne wrote.
He raised his 12-month price target for the Disney stock to $ 160 from $ 135 and maintains an "overweight" or "buy" rating on the stock. Investors have held stocks high since the company revealed details of its streaming strategy in April. On an intraday basis, the stock's 52-week high of $ 142.37 was created on April 29.
The Netflix share closed a fraction of $ 343.43 on Thursday. Since Disney's investor today, April 11, when the company won raves for its comprehensive and material review of its executive plans, the Netflix share has lost 7% of its value.
Swinburne sees Disney's speed as greater than Netflix's in terms of penetration. With 149 million global subscribers, Netflix is between 25% and 30% of broadband homes, but Disney will benefit from more established infrastructure, the analyst said.
"Why do we think Disney Plus ramps faster than Netflix: 1) The OTT market is much more developed today than 12-13 years ago, and 2) Disney brings well-known brands and IP to the marketplace," he wrote.
At the end of 2020, Swinburne expects Disney +, ESPN + and Hulu to combine for more than 50 million subscribers.
A potentially bearish scenario that Swinburne discovers is the price to compete in highstake streaming games, especially considering Disney's deal to lose from Netflix's licensing movies and television titles.