The Walt Disney Company (DIS, Financial) (1.6%) (DIS – $144.63 – NYSE) Disney’s direct-to-consumer platform, Disney+, had a successful launch in November 2019. Given the service’s breadth of high-quality content and low $6.99/month and $69.99/year price, we expect Disney’s 60-90 million 2024 global-subscriber target to be achievable and perhaps conservative. Once established, Disney+ should benefit from pricing power given its peers are priced at $10+ per month. Moreover, we expect the subscription streaming business to benefit from attractive marginal economics and rapid margin expansion at scale. Parks & consumer products remain in secular growth. New projects such as Shanghai Disney, the Disney Cruise Line ship expansions, and attendance and pricing growth associated with new lands will drive continued profit growth. Declining capital intensity will translate EBITDA growth into free-cash-flow.
From Mario Gabelli (Trades, Portfolio)'s Gabelli Value 25 Fund fourth-quarter 2019 shareholder commentary.
