As Disney prepares to report earnings on Wednesday, major analysts worry that investors will be further disappointed that estimates of streaming subscribers remain too high and need to be scaled down. The entertainment giant has said it plans for its Disney+ streaming service to have between 230 million and 260 million subscribers by the end of 2024. But its ability to hit that target has been questioned. as the stock has plummeted 28% this year and more than 40% from its peak – as recession fears grow, competition explodes and concerns about a decline in consumer spending have affect the industry. Against that backdrop, RBC Capital Markets’ Kutgun Maral projects a strong quarter for Disney in the direct-to-consumer sector, saying in a note to clients that the company remains the top pick. However, investors should prepare for a diminution of Disney’s streaming prospects if they haven’t already done so. “That said, we acknowledge the existence of a looming reset to management’s Disney+ subscriber guidance of 230-260mm, and although we believe our hot forecast is 220mm is largely in line with buy-side estimates, but our recent experience with WBD suggests that the guide cut is never written by Maral. Steven Cahall of Wells Fargo agrees that Disney needs to cut the entries. While the bank remains upbeat about the company and the continued growth of its Disney+ business, it cut its 2024 streaming estimate to 213 million from 240 million. “We think the estimates need a reset to harmonize them with the stock price,” Cahall writes. “From here, we think the DIS could exceed a more reasonable level.” cut its subscriber estimate for 2024 to 223 million from 242 million last month, noting that the company’s loss of streaming rights The Indian Premier League cricket tournament in India could cause the company to cut its target. Feldman maintained the bank’s expected net addition of 11 million for the third fiscal quarter. Sure, there are some potential bright spots that could help keep Disney on track to achieve its goals. Feldman points to the company’s launch in more than 50 new markets, a new set of content, and an upcoming level of ad support as those catalysts. “The next two quarters will be a pivotal time for Disney’s streaming story as two-quarters of strong network additions could go a long way to alleviating concerns that Disney won’t be able to hit the mark. their 2024 lead, while weak performance could put 2024 guidance out of reach,” Evercore ISI’s Vijay Jayant said in a recent note, calling the company’s guidance event an “event.” clearing “potential. At the same time, Jayant expects Disney to face advertising difficulties and a slowdown in park arrivals as consumers cut spending and fears a recession. – CNBC’s Michael Bloom contributed reporting
