Analysts say Disney’s streaming changes have led to a large enough life for life through the epidemic



Analysts have focused on the media titan’s new plans, compared to the financial results that were destroyed by the COVID-19 epidemic, with shares of the Walt Disney Company gaining 10% and more on Wednesday.

“Despite long-term concerns about cord-cutting, linear advertising, theater box office attendances, and a new normalcy in consumer travel, Disney has accomplished what its peers have not done: they bought one to get Street’s attention.” Built a large enough fleet. MoffetNathanson analyst Michael Nathanson wrote in a note on Wednesday morning, while maintaining a neutral rating and raising his price target from $ 111 to $ 118. “And that attention helps overcome poor free cash flow generation, an unusually un-Disney-like stretch balance sheet and a relatively high growth.”

That Disney life was disorganized,
+ 9.21%
Attempts to take advantage of one positive aspect of the portfolio spread by epidemic: streaming. After detailing the quarterly loss of $ 5 billion, which was replaced as a profit adjusted for an accounting move involving sports rights, Disney changed the conversation by announcing that it would give consumers Disney + and $ The long-delayed “Mulan” for 30 will allow film viewing. Will launch a new international streaming service under its Star brand.
Full earnings results: Disney shakes streaming outlook after losing nearly $ 5 billion due to epidemic

Analysts were quick to jump on the positive news and use it to dispel their doubts about Disney’s other businesses.
“While mobility related to COVID is likely to severely affect many of Disney’s businesses for some time, we are removing the 20% risk rebate that we have applied to our target price which we see as increased visibility See, “Credit Suisse analysts wrote while upgrading Disney to outperform neutral and raise their price target from $ 116 to $ 146.
With new CEO Mr Bob Chapek now hinting to showcase an ‘innovative and bold’ as more pivot, we expect Disney shares to be more aggressively positioned as a streaming growth story (Where investors have limited investment vehicles), and eventually COVID recovery play. ”
Credit Suisse was one of at least three banks to upgrade Disney shares in the wake of the Fiscal Third Quarter Earnings Report, while several raised their price target, according to FactSet, to an average price on Disney stock Increased the target from $ 128.48 to $ 132.09 Wednesday morning. to keep track. Disney shares jumped more than 10% in the morning trading session, touching a high of $ 130.30 after closing at $ 117.29 on Tuesday.
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Many of the consumer buzz from Disney’s earnings included the cost of “Mulan”, a live-action remake of a Disney animated film that has been repeatedly delayed and is now on Disney + for $ 30 on pay-per-view Will be sold as In explaining the difficult task of pricing the film, Bernstein analyst Todd Zeuser described it as “very shocking and quite a consumer bargain, depending on one’s view”.
See also: Disney + was the only plus for Disney, as Coronovirus slammed other businesses
“Of course, $ 30 is significantly less expensive for a family than that family would have to spend to watch this film in a theater. On the other hand, the marginal cost of watching another movie on Disney + or Netflix” Zero ‘. Or crafted differently, a consumer can get a half-year Holu SVOD ad-supported, or Disney + at an annual discounted rate, to view the original once for the same price, “Juenger wrote maintaining a market performance rating and raising its price. A target of $ 105 to $ 116.
While the “Mulan” move caused big waves, analysts said Disney said the move was a shutdown that would help get some much-needed revenue – Jugener said Less than 15% of Disney + will have to rent a movie for Disney to get their costs back. The big long-term move from analysts’ perspective was the move to Disney’s multi-owned North American streaming offering, an international star-branded streaming service similar to Hulu.
Rosenblatt Securities analyst Bernie Macton wrote, “This announcement was lacking, but we believe it is a significant development as it helps Disney reach 200M global streaming deposits, possibly 20M in 2022.” Can be a driver. Rating and raising its target to $ 145 from $ 135. “This will be a significant milestone in catching Netflix NFLX,”
-0.73%,
Since we expect Netflix to surpass 200M subscribers during CY’20E.
See it all:Here’s everything coming to Netflix in August 2020 – what’s going on
Juenger described it as a “chance to recur” [2019] Playbook, “referring to Disney’s launch of Disney last year. “Make a new announcement [direct-to-consumer offering]. Hold an investor day. Announce 5-year sub, ARPU, and profitability targets. Assemble the ‘Netflix Revenue Multiple’ against that guidance according to the value of the stock, “he wrote before carefully adding about that approach.
“Before we go too far, hold it, it is not at all. Disney / Fox TV content is not consumer-specific like the Disney + brands. There will be necessary investments on a large scale, we believe the largest of these will be, once again, the limit for licensing. Not to mention the accelerated decline of int’l linear channels ($ 5bn write-offs in the quarter). ”
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Not all analysts were informed of Disney’s streaming plans. Needham analyst Laura Martin reiterated its hold rating and summarized the dubious numbers released by Disney on Tuesday.
“Disney did not provide any further guidance. Costs related to COVID-19 were $ 3B in Disney’s FY3Q20, net of cost savings, $ 3.5B with adverse impact to the park alone. … until the structural economic impact of COVID-19 on Disney is clear, we stand on it. ”
However, most other analysts were happy to point to the new streaming initiative as a potential defender for Disney.
Analysts at Guggenheim wrote, “Disney management gave a message to boldly focus on additional global streaming video opportunities, taking advantage of Star and Disney + assets and a premium VOD window that advanced the stock to buy from neutral and value Increased the target from $ 140 to $ 123.
“While it would be easy to maintain a cautious or skeptical approach to these initiatives, we expect the potential expansion of streaming and economics and core underlying investor confidence in Disney intellectual property to further appreciate that more likely than here.”

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