According to Wall Street analysts, Walt Disney's latest and streaming business updates reflect the decline of Disney+ subscribers in the previous quarter.
Despite a decline in the broader market, some observers raised their stock price targets on Thursday.
Disney+ added 11.8 million net subscribers to its fiscal first quarter, which included the introduction of new television classics such as The Book of Boba Fett, on February 9. the company had surpassed Wall Street expectations for a gain of 10.8 million.
On Thursday, Macquarie analyst Steve Nollen reiterated his "outperform" rating on Disney's stock, including a $185 price target.
Steven Cahall, a well-known business analyst, says the company is doing all the right things to guide the company in the fiscal year 2024.
Disney, led by CEO Bob Chapek, is his "top growth idea," according to Cahall's conclusion.
Tuna Amobi, a CFRA Research analyst who has a "buy" rating on Disney shares, was also bullish, despite maintaining his 12-month target price of $200 on them. He highlighted that this means a 22.6 times multiple on his enterprise value per estimated fiscal year 2023 earnings before interest, taxes, depreciation and amortization, "well above its peers and the five-year historical average of 20.7 times."
Amobi explained that Disney's significantly better-than-expected results in December saw a major increase in its worldwide streaming subscriber additions at Disney+ (11.7 million net adds), ESPN+ and Hulu (4.2 million and 1.5 million). "We see an even greater acceleration in [the] fiscal second half [of the current fiscal year ending in September] as Disney significantly ramps up the international rollout of Disney+ in tandem with an aggressive content push."
After recent investor concerns about streaming subscriber momentum, BMO Capital Markets analyst Daniel Salmon noted a after-hours increase in Disney stocks and spoke of a deserved relief rally.
In the face of a heightened investor skepticism about the streaming model of late, Dunney stabilized the short-term narrative, including the Disney+ subs. Notwithstanding the after-hours drop, we think shares are likely to remain range-bound.
Michael Morris, a Guggenheim native, has a "neutral" rating on Disney, and has raised his stock price target by $7 to $172, noting: "Disney resurrected from a disappointing fourth quarter by beating (in) the main quarter where it mattered: streaming subscribers, parks trends, and consolidated profitability."
Doug Creutz, an analyst for Cowen, has boosted his Disney stock price target by $6 to $132, "on higher fully-recovered parks earnings before interest, taxes, depreciation, and amortization estimates."
In his analysis, MoffettNathanson analyst Michael Nathanson who has a "neutral" rating and a $165 price target on Disney shares described the streaming upside surprise and particularly the strong theme parks performance.
When we reflect on the massive surprise that Disney gave in the first quarter, we are primarily focused on the incredible boost in parks profits that came from the most incredible drivers we have ever seen, Nathanson said. At the time of rising inflation, the domestic park business increased zero incremental costs.
