Tag: The Walt Disney Company (DIS)

Disney's market capitalization had been eviscerated by over 30%, and the stock price hit an irrational 52-week low in early December. Disney's valuation has been in a tug of war between its legacy business model and its streaming initiatives. Disney 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 stay-at-home content provider via Disney+. However, the former has been altered due to uncertainty over the newest omicron coronavirus variant while the latter continues to build out content and expand its membership base.

Disney (DIS) has rolled out a wildly successful array of streaming initiatives that catered to the stay-at-home economy during the pandemic. These streaming efforts have transformed Disney's business model, which its legacy businesses will further bolster as the world economy prospects continue to improve and reopen, albeit minor bumps in the road.

Taken together, Disney has set itself up to benefit across the board with its streaming initiatives firing on all cylinders and theme parks coming back online. The company has been posting phenomenal streaming numbers that have negated the negative pandemic impact on its theme parks. This streaming-specific narrative will change as the theme park revenue comes back online and flows into the company's earnings. As a result, Disney presents a very compelling buy for long-term investors as the synergy of its legacy business segments get back online in conjunction with its wildly successful streaming initiatives, all of which have more pricing power down the road to expand margins. Continue reading "Disney - Irrational 52-Week Low" →

Disney (DIS) has been the sweet spot of capitalizing on the pent-up post-pandemic consumer wave of travel and spending while being the new and preferred stay-at-home content provider via Disney Plus. Over the past couple of years, Disney has rolled out and refined its wildly successful array of streaming initiatives that catered to the stay-at-home economy during the pandemic. These streaming efforts have transformed Disney’s business model, which its legacy businesses will further bolster as the world economy prospects continue to improve and reopen. Taken together, Disney has set itself up to benefit across the board with its streaming initiatives firing on all cylinders and theme parks coming back online. The company has been posting phenomenal streaming numbers that have negated the negative pandemic impact on its theme parks. This streaming-specific narrative will change as the theme park revenue comes back online and flows into the company’s earnings. Due to the tremendous success of Disney Plus, the company is now flexing its pricing power muscle and put through pricing increases on its streaming platform. This pricing power speaks to the value of Disney Plus as a standalone streaming platform while expanding its margins on this new business vertical. Disney presents a compelling buy for long-term investors as its legacy business segments get back online in conjunction with its wildly successful streaming initiatives, all of which have more pricing power down the road.

Pricing Power Flexing

Disney recently pushed through another price increase on its monthly subscription tier for its Hulu offerings. This is on top of price increases that it pushed through on its Disney Plus subscription earlier this year. Clearly, the Disney streaming platforms possess pricing power as the adoption of these steaming properties by consumers becomes more widespread. Part and parcel with these price increases is margin expansion and increased revenue. Disney has forecasted that its Disney Plus streaming platform will have up to 260 million subscribers by 2040. Thus, even marginal price increases will translate into meaningful revenue windfalls for the years to come. Continue reading "Disney - Flexing Its Pricing Power Muscle" →

Disney (DIS) is in the sweet spot to capitalize on the pent-up post-pandemic consumer wave of travel and spending. Disney rolled out its wildly successful array of streaming initiatives that catered to the stay-at-home economy during the pandemic. These streaming efforts have transformed Disney's business model, which will be further bolstered by its legacy businesses as the prospects of the world economy continue to improve and reopen. Taken together, Disney is set to benefit across the board with its streaming initiatives firing on all cylinders and theme parks coming back online. The company has been posting phenomenal streaming numbers that have negated the negative COVID-19 impact on its theme parks. This streaming-specific narrative will change as the theme park revenue comes back online and flows into the company's earnings. As a result, Disney presents a compelling buy for long-term investors as its legacy business segments get back on track in the latter part of 2021 in conjunction with its wildly successful streaming initiatives.

Durable Streaming Revenue and Theme Parks

Disney has forecasted that its Disney+ streaming platform will have up to 260 million subscribers by 2040. Even more, advertising revenue for the upcoming fall television season rose by "double-digits" from the levels of 2019 before the global pandemic, per Bob Chapek. As a result, about 40% of sales during the "upfront" sales period went to streaming or digital ads, Chapek said at Credit Suisse's virtual Communications Conference. Continue reading "Disney - Riding The Post Pandemic Consumer Wave" →

As the economy is on the fast track to reopening with a robust vaccine rollout, Disney (DIS) is set to benefit across the board. Disney’s Parks are set to reopen in stages starting in April, with its Disneyland and California Adventure theme parks slated for April 30th. The theme parks reopening will be a major catalyst for Disney as the company annualizes the COIVD-19 pandemic that shuttered all its properties worldwide. The company has been posting phenomenal streaming numbers that have negated the COVID-19 impact on its theme parks. This streaming-specific narrative will change as the theme park revenue comes back online and flows into the company’s earnings. Disney is a compelling reopening play now that the stock is double digits off its highs. Disney is a buy for long-term investors as its legacy business segments get back on track in the latter part of 2021 in conjunction with its wildly successful streaming initiatives.

Theme Parks and Streaming Synergies

Disney (DIS) expects its Disney+ streaming platform will have up to 260 million subscribers by 2040. The company continues to exceed all expectations in the streaming space accelerated by the stay-at-home COVID-19 environment. Despite the COVID-19 headwinds, Disney’s streaming initiatives have been major growth catalysts for the company. Disney+’ growth in its subscriber base has shifted the conversation from COVID-19 impact on its theme parks to a durable and sustainable recurring revenue model. Continue reading "Disney - A Discounted Reopening Play" →

The Walt Disney Company (DIS) expects its Disney+ streaming platform will have up to 260 million subscribers by 2040. The company continues to exceed all expectations in the streaming space accelerated by the stay-at-home COVID-19 environment. The company has been posting phenomenal streaming numbers that have thus far negated the COVID-19 impact on its other business segments, specifically its theme parks. Disney has had to shutter all its worldwide Parks and Resorts, and ESPN has been hit with the cancellation of virtually all sports worldwide. There have been ebbs and flows with reopening efforts across the globe with mixed results followed by rolling lockdown measures. Despite the COVID-19 headwinds, Disney’s streaming initiatives have been major growth catalysts for the company. Disney+’ growth in its subscriber base has shifted the conversation from COVID-19 impact on its theme parks to a durable and sustainable recurring revenue model. This streaming bright spot, in conjunction with the optimism of its Park and Resorts coming back online, has been a perfect combination as of late, especially with the vaccine rollout picking up steam.

Disney+ has racked up 94.9 million paid subscribers, Hulu has 39.4 million paid subscribers, and ESPN+ has 12.1 million paid subscribers. Collectively, Disney now has over 146 million paid streaming subscribers across its platforms (Figure 1). Disney+ has been wildly successful via unleashing all of its Marvel, Star Wars, Disney, and Pixar libraries in what has become a formidable competitor in the ever-expanding streaming wars domestically and internationally. Hence the tug-of-war on Wall Street between COVID-19 impacts versus the success of its streaming initiatives, with the latter winning out. Thus far, its streaming success has changed the narrative as its stock has broken through all-time highs and nearly breaking through $200 per share. Disney is a compelling buy for long-term investors as its legacy business segments get back on track in the latter part of 2021 in conjunction with these successful streaming initiatives.

Figure 1 – Streaming initiatives across its platforms with over 146 million paid subscribers in total

Post Pandemic

Disney’s business segments will inevitably recover as the pandemic Continue reading "Disney - 146 Million Streaming Juggernaut" →