Walt Disney [NYSE: DIS] started 2019 in bullish territory, and is up now up by over 25% since the beginning of the year. This follows its entry into the streaming business, putting it in direct competition with other industry players such as Netflix, Amazon and Hulu. These developments have got analysts excited about this stock. Morgan Stanley analysts are already raising their projections of Disney from $135 to $160.
Some analysts believe that this stock is highly undervalued for several reasons. One of them is the competitive pricing of its streaming service. The company will be launching its Disney+ streaming on November 12th, and has already given out its pricing projections. It will price its streaming services at $6.99 a month, which adds up to $69.99 a year. This is much more competitive than its competitors. For instance, Netflix prices its services at $8.99 a month, which adds up to $107.88 a year. Others such as Amazon are more expensive and costs $119 a year. With its competitive pricing, Disney is well positioned to eat into the market share of all the other streaming services. This supports analyst projections that Disney is undervalued.
Some analysts expect the company’s streaming services to hit 133 million users by the year 2024. Of these numbers, analysts expect that Disney+, which the company will launch in November to account for more than 50%. If it hits these numbers, Disney could be bigger than those some of its main competitors put together.
Besides pricing, there are a number of other factors that give analysts a bullish projection on Disney’s subscription numbers growth. One of them is the company’s global launch. A fast global launch coupled with Disney’s huge brand name puts the company in a strong position for growth in subscription numbers in the long run. The company also intends to leverage on 3rd party distributors, and analysts expect this to add to the upside momentum of this stock in the long run.
Looking at Disney’s stock in the short-term, this stock is gaining bullish momentum. On Thursday’s trading, the stock formed a higher low at $140.66, and closed at $141.74, which is a major resistance point in the day chart. If it pushes above this price level when markets open, then chances are that it could trade bullish in Friday trading. This sentiment is confirmed on the monthly charts, where Disney is in a bullish trend, with support on the 50-day MA at $131.74.
With all the bullish news around this stock, it is not surprising that the market has been bullish on this stock.