Morgan Stanley raised its target for Disney stock
This afternoon, shares of the Walt Disney Company (DIS) rallied after Morgan Stanley analyst Benjamin Swinburne raised his price target for the company. According to a CNBC report, the analyst now has a price target of $160 for the stock—much higher than his previous target of $135. The new target reflects upside potential of 17.9% from the company’s closing price yesterday.
Why the analyst raised his DIS price target
Swinburne based his Disney upgrade on optimism about the company’s upcoming Disney+ streaming services. He wrote in a note, “Encouragingly, consumers are voting with their wallets today, spending an estimated $15-20bn a year for movies and TV product that will ultimately make its way to Disney Plus.”
Weighing in on Disney’s huge marketing expenditure for films and brand promotions, Swinburne added that the company “is not trying from a content perspective to be all things to all people, therefore requiring less content volume.”
Also, Swinburne believes “the reward of the transition to streaming” is substantial—as are the risks involved—and that the market has misinterpreted both the risks and the rewards of this shift.
The race for streaming services
On March 25, Apple (AAPL) announced its entry into the video streaming segment with its upcoming Apple TV+ service. Over the last few quarters, Apple’s product segment sales have declined sharply, which could be one reason why the company shifted its focus to the services segment. Apple TV+ services are set to come out this fall.
As of yesterday’s closing price, Apple stock has risen 23.1% while Disney has seen 23.8% gains year-to-date.