On a downbeat day for most stocks, Disney shares have posted solid gains after a resoundingly positive verdict on the company’s streaming progress by an analyst at a major Wall Street firm
The stock was up 3% in mid-day trading, at around $136 a share, on track for its highest closing price since February 21. Shares have slipped about 6% in 2020 to date, but have recovered over the summer after a steep plunge in February and March as investors processed the extent of the company’s vulnerability due to COVID-19. The Nasdaq, S&P 500 and Dow Jones Industrial Average all lost ground Tuesday, putting Disney’s upswing in starker relief.analyst Bryan Kraft wrote in a note to clients.
Kraft upped his rating on the media company’s shares to “buy” from “hold” and raised his 12-month price target to $163 from $128. While movie theaters, sports and theme parks — all cornerstones for Disney — are in a fragile early stage of recovery, streaming has been a bright spot for the company. Last Friday,
was released as a “premier access” title, available for $30 to the 60 million-plus global subscribers to Disney+. Across Hulu, ESPN+ and Disney+, the company has surpassed 100 million total subscribers. as of yet. Sensor Tower and Apptopia, two app analytics firms, released figures showing a boost in Disney+ downloads from. Regardless of how many new subscribers came in, the profitability motive is clear.
The “clearest sign” of a true strategic adjustment, Kraft maintained, is the company’s decision to shutter some traditional pay-TV networks in international markets, including the UK. The willingness to pull those plugs, he wrote, is a “sign of confidence that direct-to-consumer will more than offset lost network revenue.”
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