Shares of Disney (DIS) - Get Walt Disney Company Report are rising Wednesday after the company was the subject of a pair of bullish notes from analysts at KeyBanc and Wells Fargo ahead of Disney's Investor Day on Thursday, Dec. 10.
Disney shares were rising 2% to $156.90 in morning trading Wednesday.
Here's what Wall Street is saying.
Wells Fargo (Rating upgraded to Overweight from Equal Weight, PT raised to $182 from $155)
Why now? Because we think DIS is set to complete its transformation into a global streaming content company including the deep Disney brands (Disney+), general entertainment (Star, Hulu, Disney18+) and eventually global sports (ESPN+). We expect global subscribers to go from 117mm today to conservatively 250-300mm in ~5 years. Global content spending would be >$22bn (excl sports) with DTC revenues of >$25bn. This is the sort of long-term story that potentially provides ample subscriber catalysts and foments a Growth-oriented investor base. Chuck the [dividend], torch EPS, spend aggressively, All Systems Go on streaming.
We think the big takeaway from December 10th will be that DIS is officially all-in on streaming. The gloves are off, the organizational barriers are torn down and there are no sacred cows. Streaming is the nucleus of Disney now, big investments in content will feed a variety of services and scale will beget scale.
- Steven Cahall
KeyBanc (Initiated at Overweight, $177 PT)
DIS now has 121M streaming subscriptions across Disney+, ESPN+ and Hulu, making DIS one of the top two streaming providers globally. The growth is impressive, and a function of DIS's depth of content, breadth of content appeal globally, and technology, in our view. We expect DIS to outline an aggressive content roadmap and international expansion plans at its December 10 analyst day, where we believe over 300M subscriptions is possible by the end of 2024 vs. DIS's previous guidance of 108M-162M.
- Brandon Nipsel