Bulletin
Investor Alert

The Ratings Game Archives | Email alerts

Aug. 14, 2021, 12:00 p.m. EDT

Disney+ has analysts bullish about near-term growth and shares jump 5%

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Walt Disney Co. (DIS)
  • X
    Netflix Inc. (NFLX)
  • X
    Apple Inc. (AAPL)

or Cancel Already have a watchlist? Log In

By Jon Swartz

The House of Mouse roared Thursday, when Walt Disney Co. announced its best financial results since the start of the pandemic, hurtling its shares up 5% in after-hours trading Thursday and the stock was still up Friday.

Analysts are lauding across-the-board earnings and revenue that topped out at 50 cents a share ($918 million in net income) and $17 billion in revenue.

Disney’s /zigman2/quotes/203410047/composite DIS -1.12% streaming service Disney+ exceeded forecasts to reach 116 million subscribers, while the television networks such as ESPN and ABC reported sales of $6.96 billion, and Disney’s theme parks and product sales segment reported $4.34 billion in revenue as it slowly reopened in the U.S. and abroad in the wake of the pandemic.

“We believe that Disney’s multiple is driven by momentum in [direct-to-consumer] – most notably Disney+ subscribers,” Michael Nathanson of Moffett Nathanson said in a note Friday. He forecasts Disney’s DTC revenue will nearly triple from $16.5 billion in fiscal 2021 to $46.6 billion in fiscal 2026 on “massive ramping in Disney+ subscribers and pricing power in high-RPU markets.”

Read more: Disney produces best earnings and sales since before pandemic, stock pops 5% higher

What Needham & Company analyst Laura Martin liked most about the quarter was the performance of Disney’s direct-to-consumer business (DTC), the cornerstone of Disney CEO Bob Chapek’s corporate strategy. Martin, who maintained a hold on the company’s stock in an Aug. 13 note, pointed to $4.26 billion in revenue for DTC, up 57% year-over-year, and 174 million total subscribers.

In raising its price target to $210 and maintaining an outperform rating on Disney, Macquaire Capital analyst Tim Nollen highlighted the addition of 8.7 million subscriptions to 116 million amid competition from Netflix Inc. /zigman2/quotes/202353025/composite NFLX +1.78% , Apple Inc. /zigman2/quotes/202934861/composite AAPL -0.53% , AT&T Inc. /zigman2/quotes/203165245/composite T -1.05% , Comcast Corp. /zigman2/quotes/209472081/composite CMCSA +0.35% , and Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN -2.90% .

“Disney+ is off to a very strong start, which we believe is the key variable governing stock performance,” Cowen Inc. analyst Doug Creutz said in an Aug. 13 note that maintained a perform rating and price target of $147.

“We still have reservations about the long-term strategy, particularly the wisdom of the Fox acquisition, and we think the company will eventually recover from current pandemic-related macro difficulties,” Creutz continued. “However, valuation appears to fully discount both an economic recovery and accelerated profit progress at the company’s DTC segment.”

/zigman2/quotes/203410047/composite
US : U.S.: NYSE
$ 169.42
-1.92 -1.12%
Volume: 7.85M
Oct. 22, 2021 4:02p
P/E Ratio
277.24
Dividend Yield
0.00%
Market Cap
$311.35 billion
Rev. per Employee
$320,813
loading...
/zigman2/quotes/202353025/composite
US : U.S.: Nasdaq
$ 664.78
+11.62 +1.78%
Volume: 6.19M
Oct. 22, 2021 4:00p
P/E Ratio
59.89
Dividend Yield
N/A
Market Cap
$289.09 billion
Rev. per Employee
$2.66M
loading...
/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 148.69
-0.79 -0.53%
Volume: 58.88M
Oct. 22, 2021 4:00p
P/E Ratio
29.12
Dividend Yield
0.59%
Market Cap
$2470.93 billion
Rev. per Employee
$1.86M
loading...
/zigman2/quotes/203165245/composite
US : U.S.: NYSE
$ 25.49
-0.27 -1.05%
Volume: 37.13M
Oct. 22, 2021 4:03p
P/E Ratio
N/A
Dividend Yield
8.16%
Market Cap
$183.93 billion
Rev. per Employee
$746,783
loading...
/zigman2/quotes/209472081/composite
US : U.S.: Nasdaq
$ 54.22
+0.19 +0.35%
Volume: 14.91M
Oct. 22, 2021 4:00p
P/E Ratio
20.25
Dividend Yield
1.84%
Market Cap
$247.98 billion
Rev. per Employee
$616,452
loading...
/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 3,335.55
-99.46 -2.90%
Volume: 3.14M
Oct. 22, 2021 4:00p
P/E Ratio
58.13
Dividend Yield
N/A
Market Cap
$1739.63 billion
Rev. per Employee
$297,430
loading...

Get news alerts on Walt Disney Co. — or create your own.
This Story has 0 Comments
Be the first to comment
More News In
Industries

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.