Disney - A Discounted Reopening Play

As the economy is on the fast track to reopening with a robust vaccine rollout, Disney (DIS) is set to benefit across the board. Disney’s Parks are set to reopen in stages starting in April, with its Disneyland and California Adventure theme parks slated for April 30th. The theme parks reopening will be a major catalyst for Disney as the company annualizes the COIVD-19 pandemic that shuttered all its properties worldwide. The company has been posting phenomenal streaming numbers that have negated the COVID-19 impact on its theme parks. This streaming-specific narrative will change as the theme park revenue comes back online and flows into the company’s earnings. Disney is a compelling reopening play now that the stock is double digits off its highs. Disney is a buy for long-term investors as its legacy business segments get back on track in the latter part of 2021 in conjunction with its wildly successful streaming initiatives.

Theme Parks and Streaming Synergies

Disney (DIS) expects its Disney+ streaming platform will have up to 260 million subscribers by 2040. The company continues to exceed all expectations in the streaming space accelerated by the stay-at-home COVID-19 environment. Despite the COVID-19 headwinds, Disney’s streaming initiatives have been major growth catalysts for the company. Disney+’ growth in its subscriber base has shifted the conversation from COVID-19 impact on its theme parks to a durable and sustainable recurring revenue model. This streaming bright spot in conjunction with optimism of its park and resorts coming back online has been a perfect combination as of late, especially with the vaccine rollout picking up steam. Disney+ has racked up 94.9 million paid subscribers, Hulu has 39.4 million paid subscribers, and ESPN+ has 12.1 million paid subscribers. Collectively, Disney now has over 146 million paid streaming subscribers across its platforms. Disney+ has been wildly successful via unleashing all of its Marvel, Star Wars, Disney, and Pixar libraries in what has become a formidable competitor in the ever-expanding streaming wars domestically and internationally. Hence the tug-of-war on Wall Street between COVID-19 impacts against the success of its streaming initiatives, with the latter winning out.

Figure 1 – Vacant Disneyland theme park readying for reopening

Post Pandemic

Disney’s business segments are coming back online as the pandemic subsides worldwide with widespread vaccinations. Disney’s theme parks are reopening, as seen with phased reopening efforts. Inevitably, movie productions will resume, movie theaters and theme parks will reopen to full capacity, and sports will return to pre-pandemic formats. The resumption of these activities will feed into Disney’s legacy businesses in conjunction with its massive streaming successes. Disney continues to dominate the box office year after year with a long pipeline of blockbusters in the queue. Its parks and resorts continue to be a growth avenue with tremendous pricing power. Disney is going all-in on the streaming front and acquired full ownership of Hulu, and the company has launched its Disney+ streaming service with tremendous success. The company offers a compelling long-term investment opportunity given its growth catalysts that will continue to bear fruit over the coming years.


Disney (DIS) has successfully shifted its business model to a subscription-based service that produces a durable, sustainable, and predictable revenue stream via its streaming initiatives. As a result, the company has been able to shift the narrative from pandemic challenges to a focus on becoming a streaming juggernaut with over 146 million paid subscribers across its various platforms. In the backdrop, its legacy business segments are ready to regain their footing as the pandemic subsides via vaccine and therapeutic options to stamp out the COVID-19 headwinds. All the initiatives that Disney has taken over the previous few years to remediate its business and restore growth appear to be coming to fruition via its Fox acquisition and its streaming initiatives. Disney+ blew out expectations with 94.9 million paid subscribers thus far into 2021 and on pace to deliver projections years ahead of schedule. Disney continues to invest heavily into its streaming services (Hulu, ESPN Plus, and Disney+) to propel its growth and dominance in the streaming space. The company is evolving to meet the new age of media consumption demands via streaming and on-demand content. Disney’s streaming initiatives will continue to be major growth catalysts moving forward. Disney is a compelling buy after a double-digit drop from its highs as its legacy theme park business comes back online in conjunction with its streaming initiatives.

Noah Kiedrowski
INO.com Contributor

Disclosure: The author does not hold shares in any of the mentioned stocks or ETFs. However, he may engage in options trading in any of the underlying securities. The author has no business relationship with any companies mentioned in this article. He is not a professional financial advisor or tax professional. This article reflects his own opinions. This article is not intended to be a recommendation to buy or sell any stock or ETF mentioned. Kiedrowski is an individual investor who analyzes investment strategies and disseminates analyses. Kiedrowski encourages all investors to conduct their own research and due diligence prior to investing. Please feel free to comment and provide feedback, the author values all responses. The author is the founder of www.stockoptionsdad.com where options are a bet on where stocks won’t go, not where they will. Where high probability options trading for consistent income and risk mitigation thrives in both bull and bear markets. For more engaging, short duration options based content, visit stockoptionsdad’s YouTube channel.