- The potential upside down
Disney Streaming services will drive the stock 29% higher to $ 200, according to a Friday note from Goldman Sachs. - Disney’s analyst day on Thursday unveiled the company’s ambitious streaming plans for
Disney Plus , which shocked the upside, Goldman said. - Disney managed to increase by as much as 11% to record all-time highlights in Friday’s trades. Here are the 3 reasons why Goldman expects the record rally to continue.
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Despite a global pandemic that shut down two critical components of Disney’s business – movie theaters and theme parks – the company is firing on all cylinders thanks to its well-timed coil to stream.
With more than 86 million users subscribed to its Disney Plus platform at the beginning of December, Disney reached its 5-year target of 60 million to 90 million subscribers in its first year of launching the $ 6.99 / month service.
Disney rose by as much as 11% to record all-time highs on Friday following the company’s analyst day on Thursday, which revealed the company’s ambitious plans for its streaming services, including Disney Plus. And Goldman Sachs believes the rally can continue. The company set a $ 200 high-street price target for Disney, which represents a potential upside of 29% as of late Thursday.
Goldman was impressed by Disney’s streaming plans, which they said were shocking upside down.
Here are the 3 reasons why Goldman expects Disney to continue to hit record highs than ever.
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1. “Disney’s updated long-term targets for its Disney + / Star DTC streaming services are significantly higher than our previous base-case estimates, and we believe well ahead of investor expectations,” Goldman said.
Disney now expects to reach 230 million to 260 million Disney + subscribers by FY2024, well ahead of Goldman’s previous estimate of 165 million.
“We believe this forecast is achievable, especially as it expands service content to include new Star-based programs outside the US,” Goldman said.
2. “The company’s plans to increase the price points for Disney + in the US and key Europe
Disney unveiled plans to increase the price of its $ 1 streaming service in the US early next year, to $ 7.99 from $ 6.99, and in some European markets 2 Euro to $ 8.99 Euro per month.
“This should help offset Disney’s plans to produce more content for its DTC platforms and bring previously planned content onto its DTC platforms faster than initially expected. As such, Disney didn’t push its estimated timeline back for its DTC services to achieve cost recovery (which we have done. also believes that investors will see it as an upside surprise), “Goldman said.
3. While Disney is pushing its DTC offerings, it remains committed to key legacy platforms, ”Goldman said.
Disney plans to continue releasing key franchise films into theaters, and while the company sees great potential for its ESPN + streaming service, it is not looking to pivot its ESPN franchise away from such traditional cable distribution fast as it is for its family and general entertainment content. . “We believe this shows that Disney is not using a one-size-fits-all approach to content monetization, but rather a balanced strategy that optimizes the value of different content platforms and distribution partners,” explains Goldman.
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