Walt Disney (NYSE:DIS) shares are trading higher Friday as investors welcomed the company's push into direct-to-consumer sports streaming, with the new ESPN service and enhanced app poised to tap into billions in rights deals, migrate millions of existing subscribers, and expand reach among cord-cutters, positioning Disney to accelerate topline growth and profitability in its sports business.
On Thursday, a research note from Goldman Sachs analyst Michael Ng reinforced a bullish outlook on Disney, maintaining a Buy rating and a price forecast of $152. Ng’s analysis points to several key advantages of the new ESPN service, which officially went live on August 21.
He argued that the launch of ESPN’s direct-to-consumer streaming service and enhanced ESPN App should drive topline growth and strengthen sports profitability.
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He highlighted the platform’s consolidation of ESPN’s linear networks and digital offerings, covering over $7 billion in annual sports rights, as a structural advantage that broadens its reach to cord-cutters and cord-nevers.
Ng pointed out that the automatic migration of 24 million ESPN+ subscribers to the new service should provide an immediate base, while the comprehensive nature of ESPN DTC, paired with new content deals like WWE’s five-year rights agreement beginning in 2026, sets up additional subscriber growth.
For context, he reminded investors that ESPN+ added 2 million subscribers in its first 10 months, underscoring the runway ahead.
He also emphasized that ESPN’s bundling options, including ad-supported and ad-free packages with Disney+/Hulu, and upcoming bundles with NFL+ Premium and FOX One, could improve customer lifetime value and reduce churn across Disney’s DTC ecosystem.
The enhanced ESPN App should raise engagement and ARPU with personalized dashboards, interactive features, expanded NFL highlights, second-screen functionality, betting integration, and e-commerce tie-ins.
Ng concluded that these initiatives give him greater confidence in Disney’s ability to meet its fiscal 2026 sports EBIT growth guidance of low-single digits, and he expects the ESPN DTC launch to be additive to overall sports revenue.
Price Action: DIS stock is trading higher by 2.99% to $119.68 at last check Friday.
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