Disney is starting to fire on all cylinders now that Covid has subsided. Disney's parks are back in full swing, and movie theaters are springing back to life in this post-pandemic environment. Despite Disney's full business nearly back online, the stock sits near a 52-week low. Disney (DIS) should be in the sweet spot of capitalizing on the pent-up post-pandemic consumer wave of travel and spending at its parks while being the new and preferred content provider via Disney Plus. The former is roaring back while the latter continues to build out content and expand its membership base.
The streaming efforts (Disney Plus, ESPN, and Hulu) have transformed Disney's business model with recurring revenue streams, which will be further bolstered by its legacy businesses now that Covid is diminishing. Taken together, Disney has set itself up to benefit across the board with its streaming initiatives firing on all cylinders while its theme parks are back online and movie theaters have reopened. The company has been posting phenomenal streaming numbers that have negated the negative pandemic impact on its theme parks. However, the streaming-centric narrative is changing as the theme park revenue flows into the company's earnings. Disney presents a very compelling buy for long-term investors as the synergy of its legacy business segments combines with its wildly successful streaming initiatives, all of which have more pricing power down the road to expand margins.
“Hulk Smash” Earnings
Bank of America analyst Jessica Reif Ehrlich noted that the most recent quarterly results were "Hulk smash" and largely driven by Disney+ direct-to-consumer segment, as well as "significantly better" results from its parks, experience, and products business, which generated $2.45 billion, compared to estimates of $1.35 billion. Continue reading "Disney - Full Business Strength Ahead"