What happened

Shares of Disney (NYSE:DIS) were surging today as the entertainment giant caught a tailwind from the broad market rebound and its Disney+ streaming service was launched in much of Western Europe.

The stock also seemed to benefit from the perception that it has been oversold as shares have fallen sharply during the coronavirus crisis, which has forced it to close all six of its theme parks around the world.

Shares were up 11.5% as of 11:05 a.m. EDT today compared with a 6.9% gain in the S&P 500.

A menu showing content from Disney+

Image source: Disney.

So what

Disney+, the marquee streaming service that includes content from Marvel, Pixar, Star Wars, and National Geographic as well as Disney classics, was launched in seven countries in Europe today: the U.K., Ireland, Germany, Italy, Spain, Austria, and Switzerland. The release on the other side of the Atlantic follows a blockbuster launch in the U.S. with nearly 30 million subscribers signing up in just the first three months. Those seven European countries have a combined population of about 260 million, meaning Disney could see a level of sign-ups similar to what it experienced in the U.S., especially since much of Europe is under lockdown-style conditions due to the COVID-19 pandemic.

In response to requests from governments and telecom companies, Disney said it would lower overall bandwidth utilization by 25% as European internet infrastructure has been stressed with so many kept in their homes by the outbreak. It also said it would delay the service's launch in France until April 7, as requested by that country's government.

Now what

Disney's market cap briefly sank below that of Netflix on Monday, showing how beat-up its stock has become in recent weeks. Shares are down nearly a third since the sell-off began on Feb. 24, falling sharply with other consumer discretionary stocks, and the company recently offered $6 billion in debt and issued a warning on its performance.

There's no question that Disney's financial performance will take a serious hit at least through the first half of the year, but investors should be confident in the company's ability to eventually bounce back. Disney has an enduring set of popular brands, and the success so far of Disney+ shows that it can also go toe-to-toe with Netflix in streaming. Even after today's bounce, the stock still looks like it's on sale.