Shares of media and entertainment giant Walt Disney (DIS) bounced 4.2% to close at $184.38 on July 12 after the company announced an increase in its monthly and annual subscription prices for its sports channel ESPN+ in the U.S., according to Reuters.
Currently, the company has a $335 billion market capitalization. Disney has gained 59% over the past year. (See DIS stock charts on TipRanks)
Disney has raised the monthly price of ESPN+ by one dollar to $6.99. Furthermore, annual ESPN+ subscribers will now pay $69.99, an increase of $10.
However, Disney kept prices unchanged for all its bundled services like Hulu and Disney+ at $13.99 per month. In addition, prices for Ultimate Fighting Championship (UFC) pay-per-view will also remain the same.
Notably, ESPN+ is on track to tap into the increasing demand for streaming and live sports as it rebounds after the last year’s lows caused by the pandemic. Furthermore, ESPN+ has recently won several rights deals and currently has approximately 14 million subscribers.
Per the terms of its recent deal with LaLiga, ESPN+ will start streaming soccer matches exclusively from August.
Last week, ESPN won a 12-year extension through 2035 to continue to televise the most-watched, annual London tennis grand-slam tournament, Wimbledon. ESPN has a long-standing relationship with Wimbledon since 2003 and won exclusive rights in the U.S. in 2012.
Furthermore, it will engage in the live streaming of the golf PGA Tour starting next season.
Earlier this month, Disney and Marvel’s “Black Widow”, starring Scarlett Johansson, had a successful opening in theatres and streaming service Disney+ at the same time. The movie earned $80 million from box office sales and made another $60 million on Disney+ in its first weekend.
After the blockbuster release of Black Widow, J.P. Morgan analyst Alexia Quadrani maintained a Buy rating and the price target of $220 (19.3% upside potential) on the stock.
Quadrani believes that the current stock price presents an attractive entry point for long-term investors.
Consensus among analysts is a Strong Buy based on 17 Buys and 3 Holds. The average Walt Disney price target of $211.47 implies 14.7% upside potential to current levels.
Disney scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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