Disney (DIS 0.17%) is providing its shareholders with many ways to profit.
So says Bank of America analyst Jessica Reif Ehrlich. On Friday, she reiterated her buy rating on Disney's stock and boosted her price forecast from $146 to $166. Her new target price represents potential gains to investors of 20% from Disney's current share price near $138.
Reif Ehrlich highlighted Disney's "spectacular" direct-to-consumer trends, which helped to drive the entertainment titan's better-than-expected performance in the fourth quarter. The incredibly popular streaming service, Disney+, saw its paid subscriber count surge to more than 73 million in its first year. That places its growth rate well ahead of Disney's goal of 60 to 90 million customers by the end of fiscal 2024, which management set when the service launched back in 2019.
Looking ahead, Reif Ehrlich sees the reopening of Disney's parks and resorts, as well as the return of blockbuster movie releases, as powerful future growth drivers.
Will Disney's stock hit $166?
Disney+ is an absolute home run for the entertainment colossus. The streaming service appears well on its way to 100 million subscribers -- an incredible figure, considering that it's well above even the high end of Disney's original five-year growth target. Some analysts think Disney could approach as many as 250 million subscribers in the coming years.
Moreover, while coronavirus-related closures and capacity caps have led to sizable losses for Disney's parks and resorts during the pandemic, a safe and effective COVID-19 vaccine could lead to a rapid recovery in customer traffic. In turn, profits for this key segment of Disney's business could rebound sharply in the year ahead.
Thus, Disney's stock price could easily reach and surpass Reif Ehrlich's $166 price forecast, delivering handsome gains to shareowners along the way.