Disney (NYSE:DIS) stock was up 1.35% in mid-afternoon trading on April 24. Shares have surged 23% over the past month after Disney was added to Bank of America’s "U.S. 1" list. The bank also dramatically raised its price target for the entertainment giant.
There has been significant focus on the entrance of tech giants like Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), and Facebook (NASDAQ:FB)into the streaming arena. These companies are pouring billions into original content creation, but Netflix remains the dominant player. Disney can change that.
The company recently unveiled its streaming service Disney+, which will be priced at a cheap $6.99 per month. The service is specially designed to undercut Netflix. Investors need to take notice. Disney has an enormous content pool to draw on. It currently dominates the box office through its Marvel, Lucasfilm, and Pixar properties, and can establish a direct line to home entertainment. To add to that, Disney has a dominant footprint in children’s entertainment, an area where Netflix has struggled.
Netflix has enjoyed success with Disney properties on its platform. Now those properties will be available only on Disney+, which means Netflix will be forced to invest more in its original content. The price differential to start out will also complicate things for the streaming trailblazer.
Disney stock is currently trading at the high end of its 52-week range. Shares had an RSI of 81 as of this writing, which puts it well into overbought territory. Investors should look to stack at every given opportunity as Disney looks like it may have real room to run into the next decade.
