Image Source: Pixabay

Shares of Disney (DIS) are on the rise on Wednesday after Wells Fargo analyst Steven Cahall upgraded the stock to Overweight and his peer at KeyBanc also initiated coverage of the stock with an Overweight rating on the company's rapid rise in streaming. Meanwhile, several other Wall Street analysts raised their price targets on Disney ahead of its investor day meeting planned for Thursday. 

BUY DISNEY: Wells Fargo analyst Steven Cahall upgraded Disney (DIS) to Overweight from Equal Weight with a price target of $182, up from $155. Cahall thinks Disney is set to complete its transformation into a global streaming content company including the deep Disney brands, general entertainment, and eventually global sports, and expects global subscribers to grow to 250M-300M in roughly five years from 117M today. The analyst also believes Disney is the sort of long-term story that potentially provides "ample subscriber catalysts and foments a growth-oriented investor base."

Meanwhile, KeyBanc analyst Brandon Nispel initiated coverage of Disney with an Overweight rating and $177 price target. The analyst said that the company's rapid rise in streaming highlights its breadth of content, expansive reach, and technology capabilities that leads Disney to be a top global streaming provider. Nispel added that Disney arguably has advantages in that area over Netflix (NFLX).

MORE BULLISH AHEAD OF INVESTOR DAY: Credit Suisse analyst Douglas Mitchelson raised the firm's price target on Disney to $178 from $146, while keeping an Outperform rating on the shares. The analyst expects a detailed run-through of each streaming service's positioning, pricing, content line-up/windowing, and financial outlook at Disney's four-hour analyst day on Thursday. Mitchelson sees subscribers guides in line with investor expectations. Further, his tracking suggests an "impressive" streaming content line-up, and believes investors might be surprised by the quantity and quality of both U.S. and international content available for its new Star service. Further, the analyst expects aggressive bundled pricing for Disney+/Star overseas. Given its increasingly aggressive pivot to streaming, he views fiscal year 2024 as the likely streaming breakeven-to-profitability guide despite the strong start for Disney+. Lastly, Mitchelson expects limited ESPN commentary, given he thinks "many hurdles" remainto take ESPN over-the-top.

Loop Capital analyst Alan Gould also raised the firm's price target on Disney to $175 from $150, keeping a Buy rating on the shares ahead of its investor day on Thursday. The company could double its prior Disney+ subscriber guidance looking out one extra year to 2025 and may also add an expanded tier to its core service, which would "greatly expand" its average revenue per user, the analyst told investors in a research note of his own. Gould added that Disney's new Star service could have as many subscribers as Hulu in five years given its total addressable market and the opportunity for bundling.

Meanwhile, Morgan Stanley analyst Benjamin Swinburne raised the firm's price target on Disney to $175 from $160 and kept an Overweight rating on the shares as he updated his direct-to-consumer expectations ahead of the company's investor day meeting. Swinburne now expects Disney+ to end fiscal year 2025 with 145M paid subscribers, with revenues of nearly $11B in fiscal year 2025, and forecasts profitability on DTC in 2024. However, for fiscal 2021, he has raised his estimate of DTC losses to $4B-$4.5B. Given recent vaccine news, he now sees his forecast for U.S. Parks losses of $2.9B in fiscal year 2021 and a return to prior peak operating income in Parks in fiscal year 2023 as "potentially conservative."