Disney is going to crush earnings like Netflix

Disney's current price as of posting: $171.89

Analysis below:

  • Netflix posted a blockbuster earnings with their streaming and subscription revenue, we believe that investors have missed the potential correlation with Disney’s new streaming service

  • We are buying early and holding before an uptrend occurs with the stock price and the implied volatility

  • As news comes out around Disney’s earnings the historically the price moves upwards

  • Disney+ is adding a hefty amount new shows that they are bringing into Disney+

Risks to their earnings:

1. A bear market can outweigh hype.

2. Investors may not like the subscription numbers they see from Disney

3. Covid shutdowns delay Disney’s parks from bringing in future revenue (low probability)

Here's an option play that we think has high probability of doing becoming profitable

Option Play: Expiration 2/19 call strike $180

Disney will report their earnings February 11th (2/11) Now we expect to see very little from any of Disney's theme parks as far as profits, but why this play could be huge is the unexpected profits from Disney+. The streaming site has started to take off and this could cause investors to start pumping into the stock. I think this stock can move well above $180. My analysis is below:

Photo source

Subscriber growth for Netflix and what it means for Disney:

What I want you to take away is that currently Netflix has grown 25% last quarter. I expect

there to be a similar or even higher growth rate for Disney+. I am expecting around a 40% increase in subscriber growth for Disney+ which would raise Disney's market capitalization to around 345 Billion, a whopping 10% change in the companies current stock price. This alone would increase Disney's share price to $189 and this is why we are buying this a Long Call Expiring Feb 19th Strike $180

Here are the links to both Earnings reports for: Disney's Q4 & the recent Netflix's Q1 earnings

Hope this helps you in your investing journey,

Brad and Colby



We are not financial advisors nor CPAs, nor certified with a financial license. These are solely our opinions and we are expressing our ideas. We do not intend for you to follow our trade as we cannot guarantee profitability.

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