Wall Street is optimistic about Disney thanks to Disney+ and other strong tailwinds.
2019 was a good year for Disney, largely thanks to the launch of Disney+, the company’s new streaming service. The service launched in November, and more than 10 million people signed up on the first day.
The demand was so high that the streaming service experienced technical issues in the week following its launch. And now some analysts are predicting that Disney+ will have over 25 million subscribers by the end of the first quarter.
Does that mean that now is the right time to invest in Disney? Here are a few things to know about the stock in 2020.
Reasons to Be Bullish About Disney in 2020
Wall Street has been bullish on Disney ever since its Investor Day last March. Disney’s CEO Bob Iger outlined the company’s vision and in particular, his goals for Disney+.
Iger explained the company’s goals for subscriber growth and how long he believes it will take Disney+ to become profitable. But the streaming service is not the only reason to get excited about Disney.
The company’s other businesses are also performing well. Seven of Disney’s films brought in over $1 billion in 2019 and the recently released Star Wars is on track to do the same. And Disney also continues to enjoy record attendance at its theme parks.
And this past year, Disney finished up the acquisition of the former 21st Century Fox, now known as the Fox Corp. This deal is worth of $80 billion and helped Disney increase its content production capacity.
And the robust content lineup makes it easier for the company to compete with companies like Netflix and Amazon.
Bottom Line
Of course, it’s not all smooth sailing for Disney. The Fox acquisition has been a drag on the company’s earnings. However, management doesn’t expect this segment of its business to become profitable until 2021.
And the company doesn’t expect Disney+ to become profitable for at least another five years. But many analysts believe Disney’s long-term projections for the service are on the low side.
Overall, the company is considered a strong buy by analysts with a potential upside of 7%. Considering the company’s investments in streaming, movies, television networks, and its theme parks, it seems likely Disney’s revenue will be strong for years to come.
