- Aprile 23, 2022
- Posted by: Oliver
- Categoria: Economics, Finance & accounting
Disney’s direct-to-consumer (DTC) service, Disney+ is proving to be a worthy competitor to Netflix. Overall, the media giant’s direct-to-consumer business is doing exceedingly well. In Q1 2022, the company saw total subscriptions across its streaming portfolio soar to 196.4 million, including the addition of 11.8 million Disney+ subscribers.
Disney is targeting its Disney+ subscribers to range between 230 million and 260 million by the end of FY24. The company is planning to launch Disney+ in new markets and anticipates its strong content slate to support growth in its subscriber base on a global basis.
This is indicated by the fact that Disney plans to spend around $33 billion on content this year and aims to add more general entertainment content to Disney+ in FY22.
While Rosenblatt Securities analyst Barton Crockett is “skeptical” about the DTC streaming sector it does see Disney as “relatively well positioned as an early mover with scaled leadership, global footprint and distinct brand.”
Moreover, the analyst pointed out that while Disney anticipates subscriber growth to be “lumpy” for its DTC business, it expects subscriber growth in the second half of FY22 to be greater than subscriber growth in the first half.
As a result, Crockett expects fewer subscriber additions in the fiscal Q2 of FY22 and more in fiscal Q3 and Q4.
The analyst is also bullish on Disney’s theme parks business and sees “the strongest demand environment” fuelled by “record pricing leverage, and big crowds.” He views more growth catalysts could come as international travel picks up and Disney’s cruise ships set sail again.
As a result, the analyst has launched coverage of the stock with a Buy rating and a price target of $177 on the stock. Crockett’s price target implies an upside potential of 39.8% to early morning trading levels on Wednesday.
Wall Street analysts are bullish about Disney with a Strong Buy consensus rating based on 16 Buys and five Holds. The average DIS stock forecast is $186.79, implying 47.7% upside potential from current levels.
Bottom Line
It is evident that while Netflix is currently struggling when it comes to shoring up its subscribers, Disney has an edge with its vast content library and is quickly catching up.
It seems that analysts have good reason to be sidelined on NFLX and bullish about Disney, even after the former’s monumental price crash earlier today.