Disney kicks off 2020 with a green signal from the Wall Street analysts

Written by: Michael Harris
April 28, 2020
  • Disney's stock records an upward rally at the start of the new year following Wall Street's buy rating.
  • Bernie McTernan of Rosenblatt Securities forecasts 25 million new subscribers for Disney+ in Q1.
  • 9% of Netflix users forfeit their subscriptions and opted for Disney+ in 2019.
  • Apptopia says Disney+ is top ranked on Google and Apple stores with 9.5 million active users per day.
  • Disney gained 31% in the stock market in 2019 while the Bank of America sees a target price of $168 for the stock.

Disney started off the new year on the right foot as shares gained significantly following a recent forecast by Wall Street analyst that the streaming service, Disney+, is likely to post remarkable growth in the upcoming months. The expert also advised the investors to continue buying Disney’s stock.

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The on-demand video streaming service was launched by Disney on November 12th, 2019 in the United States, Canada, and the Netherlands. By the end of March 2020, it will be launched in Europe and Latin America as well.

According to Rosenblatt Securities analyst Bernie McTernan, a survey carried out by his firm suggests that the first quarter is likely to see Disney+ attracting as many as 25 million new subscribers.  In a previous estimate, he had capped the figure at 21 million.

Disney’s New Streaming Service Is Pulling Away Subscribers From Netflix

McTernan reiterated his buy rating on Disney’s stock and highlighted a target price of $175 for the stock. He also suggested that Disney+ is managing to pull a significant chunk of users from its staunch competitor, Netflix.

According to the survey carried out by Rosenblatt Securities, 29% of Disney+ subscribers said that they unsubscribed from a streaming service that they were previously using after subscribing to Disney+, while 9% of them specifically said that they forfeit Netflix subscription.

The company has not disclosed any figures since the launch of the service in November and has announced that it doesn’t plan on doing so until the end of the first quarter in February. The only figure disclosed by the company was in November when it said it secured 10 million subscriptions in one day.

However, according to Apptopia that independently tracks apps performance, Disney+ is currently ranking on top of Google and Apple stores, with 22 million mobile downloads and 9.5 million active app users daily, on average.

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Disney Gained 31% In The Stock Market In 2019

Disney’s stock jumped more than 31% in 2019 and closed up 2.5% on Thursday at $148.20 per share.

A survey carried out by the Bank of America analysts reported that out of all 29 streaming services in the States, Disney+ is currently taking the lead noting the highest market growth. In the long-term, however, the survey added, Disney+ may not be able to retain its growth rate in the market.

The analysts believe that providing fresh, original content is likely to help Disney in competing against its rivals like Netflix, Hulu, Amazon Prime, etc. as it will ensure that the company attracts new subscribers while retains those who have already signed up.

The Bank of America currently has a strong buy rating and a target price of $168 for Disney’s stock.