Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Disney Stock Gained 22% in December

By Jeremy Bowman - Jan 7, 2021 at 3:43PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A bullish forecast at its investor day conference helped lift the stock.

What happened

Shares of Walt Disney ( DIS -0.67% ) jumped last month after the entertainment giant unleashed a wave of impressive updates at its investor day conference on Dec. 10, including a significant expansion in its goals for Disney+ and the rest of its streaming services. That news helped propel the stock up 22%, according to data from S&P Global Market Intelligence, hitting an all-time high in the process.

As you can see from the chart below, shares surged on the update and tacked on more gains at the end of December.

DIS Chart

DIS data by YCharts.

So what

Disney stock rose 13.6% on Dec. 11 following the announcements at the investors conference. Shareholders seemed most excited about the new streaming forecasts, as the company now expects to reach 300 million-350 million subscribers by 2024 across its streaming services, which include Disney+, Hulu, and ESPN+. That's up from 137 million currently and a reflection of Disney's plans to dramatically ramp up content for its services. Included in that guidance is 230 million-260 million Disney+ subscribers, up from 86.8 million currently and much better than its original forecast of 60 million-90 million subscribers by 2024. Over the next few years, the company also plans to release 10 Star Wars series10 Marvel series, and 15 Disney series, including animation, live action, and Pixar. The entertainment giant also said it would raise the monthly price on Disney+ from $6.99 to $7.99.

Rising blue and orange stock chart

Image source: Getty Images.

Now what

Disney had already announced earlier that it would restructure its entertainment division around Disney+, and the news at its investor day has only reinforced shareholders' confidence in that strategy. Considering that Netflix has a valuation north of $200 billion, it seems reasonable to expect Disney shares to climb as its streaming services become preeminent and the company is valued more like a growth stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$146.22 (-0.67%) $0.98

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/05/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.