One of the real bright spots in entertainment giant Disney’s (DIS) operations of late has been its streaming platforms. A lot of people are watching, and paying, which is good news to investors. A new report, meanwhile, notes that Disney’s streaming packages are proving impressively sticky, even more so than rival Netflix (NFLX). Investors welcomed the news and sent shares surging over 2% in Monday afternoon’s trading.
In particular, the combination pack of Disney+, Hulu, and Warner Bros. Discovery’s (WBD) Max is actually proving very attractive. Subscribers are sticking around, with around 80% of subscribers remaining subscribers three months after the combination deal was launched, the report noted. This in turn makes the package stickier—how long customers stay customers—than any of the services by themselves.
With customers clearly liking the value that Disney+ / Hulu / Max represents, it is a safe bet it will continue for some time. And yes, it even outperformed Netflix in the same period. Netflix only kept 74% of its subscribers for the same period, the report noted. It helped that many of the customers involved were already subscribers of at least one component, so the bundle pack caught plenty of attention.
Cash Mountain
As for the theme parks, Disney actually responded recently to the notion that it had priced itself out of reach for many common families and households. The down side here, however, is that the response was basically “did not!”. A statement from Disney pointed out that there are several pricing options available, making it possible, if only just, for families to enjoy a Disney experience without the need for a second mortgage or discovering oil in their backyard.
Disney representatives did have a point, that there were options, and that not all of the options came with extra fees. Though there is the counterpoint to consider: you may not need the Lightning Lane passes in particular, but when you are paying that kind of money to get into the park to begin with, why spend that much time simply waiting in line?
Is Disney Stock a Buy or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DIS stock based on 15 Buys and five Holds assigned in the past three months, as indicated by the graphic below. After a 4.01% rally in its share price over the past year, the average DIS price target of $129.67 per share implies 16.49% upside potential.
