Disney’s streaming business is valued by investors at more than $100 billion. Barclays estimated the value (Disney+, Hulu and ESPN+) by calculating an enterprise value for the core business of the company, and then subtracting from the company’s total enterprise value of roughly $320 billion. Enterprise value is a tool that includes a market cap with short and long-term debt.
Barclays nails Disney’s core business at $213 billion. That makes Disney’s streaming businesses worth around $107 billion to $108 billion. Shares of Disney are almost 6% above the closing price on Nov. 11, the day before the new streaming service took off. From the analytics, the stock is up by more than 30% in the past year.
Disney has kept a market cap of about $260 billion, while in the case of Netflix is at about $144 billion. However, this doesn’t make Barclays assertive on Disney in such a scenario. The valuation for the company’s streaming business is the reason that the stock could be a relative underperformer.
Disney+ debuted in November, gaining 10 million+ subscribers on the first day. As of October, Netflix had 158 million subscribers and 60 million+ in the US.
Rosenblatt Securities analyst Bernie McTernan said that the streaming service will reach 25 million subscribers by the end of the first quarter. Disney is planning to target 60 million to 90 million subscribers internationally by the end of 2024.
“We believe Comcast and Netflix are the best positioned in the evolving ecosystem and continue to provide great value,” Barclays said.
To keep growing its streaming services, which includes Hulu and ESPN+, the Mouse House needs to sign deals with internet service providers, Barclays said. This can create bundled streaming products and internet service, providing a boost to broadband companies, Barclays said.