Disney Stock Emerges as the “Only Credible Challenger to Netflix,” Analysts Say

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Walt Disney Company CEO Bob Iger in front of Cinderella Castle

Credit: Inside the Magic

In a dynamic market where streaming services have become the new battleground for media giants, Disney stock stands out as the “only credible challenger to Netflix,” according to analysts at Bernstein.

Disney executive layoffs
Credit: Inside the Magic

Disney Recognized as a Major Hollywood Player

The renowned financial research firm has initiated coverage of Disney stock with an outperform rating, emphasizing the company’s remarkable potential in the streaming industry.

Disney Media, known for its iconic content and rich legacy, has made significant strides in digital streaming. Despite facing challenges in its linear-media business, analysts believe Disney’s future is exceptionally bright in the streaming arena.

Related: Disney Hits Rock Bottom After CEO Makes Massive Announcement

One key factor contributing to this optimism is Disney’s pursuit of acquiring the remaining portion of Hulu that it doesn’t already own.

Disney executives
Credit: New York Times

DIS Stock Hit All-Time Low Under Disney CEO Bob Iger, Experts Remain Interested

Laurent Yoon, the analyst leading the coverage, believes Disney is poised for success with Hulu. While he anticipates that Disney will eventually reveal more details about Hulu’s financials, Yoon cautions against overhyping its potential, as it could result in higher acquisition costs for the one-third share of Hulu currently owned by Comcast Corp.

Related: Experts Say Disney Stock Is Promising Despite a Nosedive in Attendance

Bob Iger in front of screens loading the Disney+ and Netflix streaming services
Credit: Thibault Penin (left and right) and Angela George via Wikimedia (front)

Walt Disney Stock Considered Promising

Yoon envisions considerable synergy between Disney, Hulu, Disney+, and ESPN. He predicts that a bundle featuring Disney+ and Hulu would pose a formidable challenge to Netflix, offering a complete suite of both shows (Hulu) and movies (Disney+).

While it’s challenging to determine the precise overlap between the two products, Yoon expects Disney to come close to Netflix in terms of average revenue per user (ARPU). He also considers Disney+ to be “underpriced.”

Related: Disney Company Stock Crashes Amid Major Announcements

Arnold Schwarzenegger can now add Netflix executive to his growing resume; Arnold Schwarzenegger on the right and Netflix logo on the left
Credit: Inside the Magic

Disney Parks and Disney Media All Contribute to DIS Stock

In addition to its domestic prospects, Yoon is bullish about Hulu’s international opportunities. He estimates that Hulu could generate incremental revenue ranging from $2 billion to $9 billion, depending on bundling strategies and content investments.

Disney+ vs Netflix
Source: Lunchbox Magazine

United States Earnings Represent Only a Small Portion of DisneyValue

In his note to clients, Yoon states, “Disney has the most promising [direct-to-consumer] business amongst its traditional media peers.” He backs his optimism with a $103 target price on Disney’s stock.

While Yoon acknowledges that Disney may need some time to strike the right balance between pricing and content strategies, he firmly believes that Disney’s streaming margins should not lag significantly behind Netflix’s, contrary to the current trading multiple.

HBO Max rebrand, stock drop arrow with HBO crossed out. edited warner bros
Credit: Warner Bros. Discovery, Inside the Magic

The Walt Disney Company Stock Price Remains Competitive Despite Streaming Losses

The endorsement from Bernstein underlines Disney’s growing stature in the streaming market. With its compelling content library, strategic acquisitions, and international ambitions, Disney is making a solid case for itself as the “only credible challenger to Netflix.”

As the battle for streaming supremacy continues, Disney appears ready to play a leading role in shaping the future of digital entertainment.

The stock market remains enigmatic, even to experts. What do you think about stock in the Walt Disney Company?

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