Investing.com – Shares of Disney racked up gains on Thursday, as Morgan Stanley (NYSE:MS) said it expected the media giant's streaming services would win over new subscribers faster than previously expected.
Morgan Stanley raised its price target on Walt Disney (NYSE:DIS) to $160 from $135, sending its shares up 4.2% higher by 1:25 p.m. ET (17:12 GMT). The bullish view on Disney comes as the media giant has expedited the launch of its streaming service, Disney+, and bolstered its catalog of content.
Disney has been the top performer among stocks in the Dow Jones Industrial Average on Thursday, adding about 39 points to the Dow's 97-point gain.
The investment house estimates that Disney+ should bring in 130 million global subscribers by 2024, in line with company's own new guidance.
"Our willingness to underwrite these higher DTC (direct-to-consumer) estimates stems from 1) a faster-than-expected global launch, 2) more IP aggregated more quickly than anticipated, and 3) a plan to leverage third-party distribution," Morgan Stanley said.
Despite the U.S. launch of Disney+ still months away, there has been much fanfare over its upcoming streaming service.
A survey by Ampere Analysis last week revealed that customer awareness of the service is widespread, and a significant part of those polled plan to subscribe for the digital platform when it launches in November. More than 1,000 respondents were polled, with 22% confirming plans to subscribe to the service.
With the streaming wars set to widen in the months to come, Wall Street is seemingly betting on Disney to lead the charge against leader Netflix (NASDAQ:NFLX), whose growth in its core U.S. market has come under scrutiny.
“Netflix appears to be nearing its peak subscriber point in the U.S.,” said PwC in its Global Entertainment & Media Outlook 2019–2023 report, released earlier this month. "The first-mover advantage in streaming video that Netflix has capitalized on to date continues to be eroded, as the industry begins to fragment, with more and more companies entering the market, from pay-TV heavyweights to specialized, niche players,” PwC added.
Disney+ is expected to launch in North America on Nov, 12.
Disney shares are up about 28.4% this year, fourth best among the Dow stocks, after ending 2018 with just a 2% gain.