Yesterday Morgan Stanley raised its 12-month price target on Walt Disney Company (DIS) from $135 to $160, as it noted that the media company’s new streaming service, Disney+, could boost its adjusted earnings to over $11 per share by fiscal year 2024.
Walt Disney shares closed higher for a second consecutive trading session in New York on Thursday. It has also been the sharpest daily surge since April 12th. The stock went up 4.44% ($6.02) to $141.74, after touching an intraday high at $141.85, or a price level not seen since April 29th ($142.37).
Shares of Walt Disney Company have risen 29.27% so far in 2019 compared with a 15.35% gain for the benchmark index, S&P 500 (SPX).
In 2018, Walt Disney’s stock went up 1.99%, thus, it again outperformed the S&P 500, which registered a 6.24% loss.
“Stepping back and admittedly taking the long view, investing in Disney shares is a play on the durability of its IP,” Morgan Stanley analyst Benjamin Swinburne wrote in a client note, cited by CNBC. “Encouragingly, consumers are voting with their wallets today, spending an estimated $15-20bn a year for movies and TV product that will ultimately make its way to Disney Plus.”
Disney+ is to be launched on November 12th in the United States and is to include content from Disney brands such as Star Wars, Marvel and Pixar. It will also include Fox brand National Geographic and animated sitcom ”The Simpsons”, which Disney acquired recently.
According to Swinburne, Walt Disneys platform is projected to attract nearly 13 million subscribers by the end of fiscal year 2020 and 70 million subscribers by fiscal 2024.
“Disney already incurs significant marketing costs supporting its brands, notably its films, and as a narrower service, it is not trying from a content perspective to be all things to all people, therefore requiring less content volume,” Morgan Stanleys Swinburne wrote. “We believe the market has often overstated the risk and underappreciated the reward of the transition to streaming.”
According to CNN Money, the 21 analysts, offering 12-month forecasts regarding Walt Disney’s stock price, have a median target of $154.00, with a high estimate of $180.00 and a low estimate of $123.00. The median estimate represents an 8.65% upside compared to the closing price of $141.74 on June 13th.
The same media also reported that 18 out of 26 surveyed investment analysts had rated Walt Disney’s stock as “Buy”, while 8 – as “Hold”.
Weekly Pivot Levels
By using the traditional method of calculation, the weekly levels of importance for Walt Disney Company (DIS) are presented as follows:
Central Pivot Point – $136.10
R1 – $140.70
R2 – $143.37
R3 – $147.97
R4 – $152.58
S1 – $133.43
S2 – $128.83
S3 – $126.16
S4 – $123.50
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