- Disney+ attendance is expected to return by Q422
- Content spending is set to increase by $8B to manage expectations
- Wells Fargo argue Disney is well-positioned as a ‘large-cap growth stock' for 2022
2021 proved to be a mixed year for Disney (NYSE: DIS), their latest earnings report outlined a growing subscriber base, but at a rate of growth that didn’t exactly wow Wall Street – stock sunk accordingly as investors sought more reliable streaming services like Netflix. Yet Disney has a habit of overcoming the obstacles that constantly rival its place at the top, but with firmly rooted competitors relishing a reliable customer base – some investors aren’t quite convinced.
Well, over at Wells Fargo; it’s a slightly different story. Analyst Steven Cahall outlines the pragmatic obstacles that Disney might face in remaining a leading streaming contender, and in order to meet its fiscal 2024 subscriber guidance. Cahall went as far as to surmise Disney’s 2022 backdrop as a “proper execution story”, and that given the company’s history in living up to content expectations – the following year could provide great opportunities for large-cap investors.
Cahall maintained an Overweight rating of the stock and a price target of $196 – equating to a 25% potential upside. Disney plan on increasing their content spend by $8B to a total of $33B, yet the company still needs to average 27M net adds per year from FY22 to FY24 in order to align with Disney+ guidance. Disney+ is also worth $114B less than rival Netflix, offering further growth potential.
For large-cap investors looking for the 2022 growth stock to bolster their portfolio, Disney might be worth looking at. Wells Fargo certainly seem to think so…