Disney stock could jump 18% to $ 182, analyst says
Actions of Disney (NYSE: DIS) were ruthlessly punished immediately after the COVID-19 outbreak, losing more than 40% of their value. The stock came out of that hole and is now up about 7% for the year. As stocks are near all-time highs, they will hit new highs next year.
That’s according to Wells Fargo analyst Steven Cahall. On Wednesday, Cahall upgraded overweight (buy) Disney shares to equal weight (maintain) and raised its price target from $ 155 to $ 182. His new target represents potential gains for investors of around 18% from the stock’s closing price on Tuesday of around $ 154.
Disney’s California Adventure. Image source: author.
Cahall called Disney’s “transformation into a global streaming content company” as the main catalyst for growth, citing “deep Disney brands” such as Disney +, Hulu, Star, ESPN and Disney 18+ (the offer aimed at adults which is rumored to be in the works).
“Gloves are taken off, organizational barriers are broken and there are no holy cows. Streaming is now Disney’s core, big investments in content will fuel a variety of services and scale will engender scale. “Cahall wrote in a note to clients. He went on to say he expects Disney’s subscriber base to grow. cautiously to 250 million to 300 million over the next five years. For the context, tech giant Netflix ends the quarter with 195 million subscribers.
Will Disney stock hit $ 182?
Evidence suggests Cahall made the right choice. The company originally predicted the number of Disney + subscribers to reach 60 to 90 million by 2024. Favorable winds provided by various stay-at-home orders around the world have accelerated adoption, and Disney + has closed the year with 73.7 million subscribers, well ahead of schedule.
Given the impressive growth in its streaming business and a coronavirus vaccine about to be released, Disney may soon regain its title of “the happiest place on Earth.”
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.
