Top Picks 2020: Disney Co. (DIS)

01/21/2020 5:00 am EST


Bryan Perry

Editor, Cash Machine, Premium Income, Quick Income Trader, Instant Income Trader

Of the major media stocks taking center stage this year, Disney Co. (DIS) stands to march higher following the acquisition of Fox and the recently announced launch of its subscription streaming service, observes Bryan Perry, growth and income expert and editor of Cash Machine.

Back on June 20, 2018, Fox accepted Disney’s massive $71.3 billion offer in cash and stock to buy the company.  In the whopping deal, Disney outbid Comcast’s $65 billion all-cash offer.  Disney’s acquisition includes the 20th Century Fox film and TV studio, Fox’s American cable channels and U.K.-based Sky News.

The deal arguably makes Disney the new “king of content” and the synergies with its own studios Disney Pictures, Pixar, Marvel, Lucasfilm and Touchstone.

Plus, 2019 box office hits like Avengers: Endgame, Captain Marvel, Dumbo, Aladdin, Toy Story 4 and The Lion King will most certainly pad third and fourth-quarter earnings.

Heading into the fourth quarter, the release of Star Wars “The Rise of Skywalker” was set to do well per reviews and the movie has generated box office receipts of over $500 million as of the last week in December. It was also the second-highest grossing Christmas Day earnings of all time.

Disney+ now boasts over 20 million subscribers and though the launch didn’t go as smoothly as planned, drawing some to scoff at its execution, nobody is laughing now.

Shares of Disney vaulted higher to a new all-time high of $153.41 on the back of very strong third quarter results before settling back to its rising 50-day moving average at the $145 level where I believe there is good technical support. Of the 25 analysts that cover the stock, the highest forecasted price target on the Street is $175, but I believe the stock can hit $200 by New Year's Eve 2020.

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