Bank of America Maintains Buy Rating for Disney Amid Subscription Price Increases
Disney (DIS) has raised the price of its ad-free Disney+ plan to $21.49 per month, marking a significant increase from when it launched in November 2019 at $6.99. These hikes have contributed to improved profitability for Disney's streaming segment, which reported $712 million in operating income during the June quarter—more than double compared to the previous year. Subscription fees rose by 15%, while advertising revenue only grew slightly by three percent. Bank of America analyst Jessica Reif Ehrlich has reiterated a 'buy' rating for Disney with a price target of $125, which is about 18% above its recent share price of $105.59. The bank cites the recent price increases across Disney+, Hulu, and ESPN+ as one of the key factors expected to drive outperformance in shares. The analyst also highlighted other growth drivers including strong earnings per share potential, theme park recovery, multiyear sports tailwinds at ESPN, and a new leadership team under CEO Josh D’Amaro. However, weaker movie performance could temporarily impact revenue.
Tickers: $DIS
Topics: Disney Investment Advice Streaming Services Subscription Pricing