Disney ‘s planned buyout of Hulu will offset any near-term troubles and benefit the company long term, according to Bernstein. The firm initiated the stock with an outperform jurating. Analyst Laurent Yoon’s price target of $103 implies a potential 27% gain from Thursday’s close. Yoon noted that while Disney’s plan to buy out Comcast’s 33% stake in Hulu poses near-term risks due to uncertainty around how much the acquisition will ultimately cost, Disney “has more to gain with full control of the asset” in the long run. “Despite our bearish view on Linear vs. consensus, we are bullish on DIS’s potential to transition to DTC [direct to consumer] at scale once combined with Hulu,” he wrote. “We forecast DTC growth to outpace Linear decline, supporting overall growth of Media, with DTC revenue surpassing Linear revenue in 2024, and Disney becoming the undisputed #2 subscription video on demand.” Yoon added that besides Disney’s status as the “only credible challenger to Netflix,” the company’s parks business adds an additional strong revenue stream. “While our target price multiple implies a decent premium to its legacy peers, it is still 7x turns less than Netflix, the industry leader, and we believe DIS should command a premium as a stable growth story with a strong Parks foundation,” he said. Shares of the entertainment conglomerate have slipped nearly 7% this year. Over the past six months, the stock has lost more than 19%, as questions over who will succeed CEO Bob Iger linger. DIS YTD mountain Disney YTD chart — CNBC’s Michael Bloom contributed to this report. Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
