Disney surges as Guggenheim upgrades as strong Q3 gives 'greater confidence' in outlook
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Walt Disney (NYSE:DIS) shares surged nearly 9% on Thursday after the media and entertainment giant reported strong third-quarter results and continued to add Disney+ subscribers at a brisk pace, prompting investment firm Guggenheim Securities to upgrade the stock.
Analyst Michael Morris raised his rating on Disney (DIS) to buy from neutral and boosted the price target to $145 from $110, pointing out the firm has "greater confidence" in the company to keep trends at its Parks segment going in the right direction and the effectiveness of price increases and cost controls for its direct-to-consumer business.
Morris added that he is "confident" Disney+ will reach profitability in [fiscal 2024] and have its peak losses in fiscal 2022.
Disney (DIS) said second-quarter revenue rose 26% year-over-year to $21.5B, topping expectations of $21B. Adjusted earnings came in at $1.09 per share, topping analysts' expectations for a profit of 99 cents a share.
The Bob Chapek-led Disney (DIS) said its Parks, Experiences and Products revenue soared 70% year-over-year to $7.39B, while Disney Media and Entertainment Distribution revenue climbed 11% year-over-year to $14.11B. 
Operating income at its Parks unit rose six times to $2.19B, while the media and streaming side declined 32% to $1.38B.
The company added 14.4M Disney+ subscribers bringing its total to 152.1M, topping the 10M analysts had forecast. 
Disney (DIS) also said it now has 22.8M ESPN+ subscribers and 46.2M Hulu subscribers, bringing its total subscribers to 221.1M, surpassing Netflix (NFLX). Disney (DIS) also said it would raise the price of its ad-free Disney+ subscription by 38% to $10.99 a month, while the ad-free version of Hulu will go up $2 to $14.99 a month. 
It will introduce the ad-supported Disney+ option at $7.99 a month on December 8, while the ad-supported version of Hulu will go up $1 to $7.99 per month.
The Disney bundle of ad-free Disney+, Hulu and ESPN+ will stay at $19.99 per month.
On Disney's (DIS) earnings call, CFO Christine McCarthy updated guidance for Disney+ Hotstar subscribers to be between 215M and 245M by the end of 2024, down from a previous forecast for 230M to 260M subscribers, citing the loss of Indian Premier League digital rights.
Analysts are universally optimistic on Walt Disney (DIS). It had an average rating of BUY from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates DIS a BUY.