- Disney reported better-than-expected December quarter earnings results on Tuesday.
- The company also announced that its direct to consumer streaming offering ESPN Plus will be priced at $4.99 a month.
Analysts are impressed with Disney's latest theme park sales and are assessing the media giant's future in an increasingly internet video streaming world.
Disney reported better-than-expected December quarter earnings results on Tuesday. The company also announced that its direct to consumer streaming offering ESPN Plus will be priced at $4.99 a month.
The company's shares were down nearly 1 percent Wednesday.
Here is what the analysts wrote in their notes to clients after the report.
1) Morgan Stanley
"The results and outlook highlight both the opportunities and risks for Disney as the market shifts to OTT [over the top] distribution. Fortunately, risks appear to be stabilizing and the OTT opportunity growing. Meanwhile, Parks were key to 1Q results, and tax outlook is even better than expected."
2) Piper Jaffray
"We remain upbeat on DIS shares as the company progresses with the FOX acquisition, delivers on a robust film slate, stabilizes ESPN with growth from carriage renewals/ new vMPVD subs, and continues momentum at the Parks. … The quarter was driven by sizable outperformance across Parks and Resorts with domestic attendance up 6% (vs our est of +5%) and per cap spending up 7% (vs our estimate of 4%)."
3) J.P. Morgan
"At the Parks, we raise estimates on almost all metrics including domestic attendance, per cap spending, occupancy, and per room guest spending following the strength of FQ1 results with Disney set to benefit from a Toy Story Land opening later this year. At the international parks, Paris continues to perform better with the 25th anniversary celebration (and consolidation of ownership), and Shanghai remains healthy with its Toy Story Land to open in April."
4) Pivotal Research
"Overall, current quarter trends were generally positive … Discussion of the new ESPN direct-to-consumer app took on a central role in management's commentary on the call. While we can imagine that there will a significant number of hard core sports fans who will embrace a well-designed product with a sufficient volume of incremental content, we think it remains too early alter forecasts by much to account for the product."
5) Atlantic Equities
"We were a little underwhelmed by the ESPN DTC offering which will be priced at $4.99 and which will include a wide range of currently un-monetised rights. We had hoped there would be more slicing and dicing of the rights to give a wealth of different purchase options (e.g. buying an incremental NHL pack or an MLB pack) but perhaps this will [be] the next version of the service. Overall the ESPN DTC, which is still slated for a spring launch, very much appears to be an add-on for ardent sports fans rather than a replacement for any existing cable service."
— CNBC's Michael Bloom contributed to this story.