Disney Stock Upgraded On Streaming Potential

Barclays thinks Disney's shift to streaming could be a boon for ESPN

Josh Selway
Oct 19, 2018 at 9:57 AM
facebook twitter linkedin


Walt Disney Co (NYSE:DIS) is trading up 1.4% this morning at $117.75 and earlier hit a three-year high of $118.13 after a bull note out of Barclays. The firm upgraded the blue chip to "overweight" from "equal weight" and boosted its price target to $130 from $105, representing all-time-high territory and a 12% premium to last night's close at $116.18. Barclays has high hopes for Disney's shift to streaming, suggesting it could help struggling businesses like ESPN.

DIS shares have been trending higher in recent months. Providing support along the way has been the 80-day moving average, while the stock has also moved past the $110-$114 area that acted as a roadblock throughout the year. Overall, the Dow component sports a year-over-year gain of almost 17%.

In the options pits, traders have long preferred DIS calls over puts. This is according to the 50-day call/put volume ratio of 2.10 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Not only does this show that call buying has more than doubled put buying in the past 10 weeks, but the ratio ranks in the 84th annual percentile, showing such demand for long calls is rare.

Speaking of streaming, Roku Inc (NASDAQ:ROKU) also just received some bullish analyst attention, with RBC raising its outlook to "outperform" from "sector perform" and its price target to $70 from $48. The analyst covering ROKU thinks the company can sustain its revenue growth thanks to its strong ad-supported streaming services.

ROKU stock has gained 2.1% to trade at $58.23 following the upgrade. The shares have been strong since their April lows near $35, and they got a bump a couple days back thanks to news the company's technology was again available in Mexico. Half the analysts covering the equity still have just "hold" ratings in place, however, suggesting there's room for more bullish attention going forward.


A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earnings guide for Q3 before it's too late!


  
 
Special Offers from Schaeffer's Trading Partners