Shares of the media giant, The Walt Disney Co. (NYSE: DIS) continued to slide in morning trading on Thursday after the company’s Q2 results failed to impress investors and the fall in Disney+ subscribers left investors worried.
As Wells Fargo analyst Steven Cahall pointed out that while Disney’s average revenue per user rose by 20% quarter-over-quarter to $7.14 per month, Disney+ added less-than-expected subscribers of 157.8 million at the end of fiscal Q2 versus estimates of 163.5 million. The analyst added that Disney needed to expand this profitability to all of its direct-to-consumer services.
Cahall added that with Hulu set to be integrated into Disney+ later this year, investors’ focus will be mainly on the company’s streaming services and earnings.
DIS stock is the analyst’s favorite long-term pick and Cahall continues to be bullish on the stock with a Buy rating and a price target of $147. The analyst’s price target implies an upside potential of 45.3% at current levels.
Meanwhile, Bank of America analyst Jessica Reif Cohen hailed the significant changes taking place at the company but believes that these changes are likely to take time. The analyst is also upbeat about the stock with a price target of $145, implying an upside potential of 33.5% at current levels.
Cohen commented, “The presence of Bob Iger as CEO should support investor sentiment” and cited the near-term catalysts for the stock including “robust” demand at its theme parks and sports betting optionality that could be derived from ESPN.
Overall, Wall Street analysts continue to be bullish about DIS stock with a consensus rating of Strong Buy based on 13 Buys and three Holds.
