Analyst Note| Neil Macker, CFA |
Disney outlined an aggressive direct-to-consumer strategy at its investor day on Dec. 10 as the company appears to be taking the fight to Netflix globally. Disney also showed or discussed over 100 pieces of content that will stream on its DTC platforms over the next three years. As a result of its plans and content investment, management outlined a much higher outlook for Disney+, calling for 230 million-260 million subscribers by fiscal 2024, up considerably from the April 2019 forecast of 60 million-90 million. Even with 86.8 million current subscribers, Disney believes that Disney+ can triple in size over the next four fiscal years. We are raising our fair value estimate to $140 from $127 due to much higher subscriber growth offset slightly by higher content spending.