Disney – Family fun and wholesome content. That’s what I think of when I think of Disney. Theme parks, Kids programming, movies and sports through the ESPN franchise. Is sports gambling the next frontier? Disney CEO Bob Chapek sees it as a logical extension for ESPN to further engage young adults and add another revenue stream. Disney has already partnered with Ceasers $CZR and Draftkings $DKNG with links to their sportsbook through ESPN. Disney Is ‘Aggressively’ Pursuing Opportunities In Sports Betting (forbes.com) Globally, the sports betting market is valued at $70 Billion. The stigma of sports betting has diminished with the proliferation of fantasy sports and the growth of fantasy sports sites such as Draftkings and FanDuel. Many states have rushed to capitalize on tax revenue by legalizing sports betting.
Prior to the pandemic, I already thought that Disney was a money printing machine. Their movies, merchandising, theme parks, cruise lines were all cash cows. With the pandemic shutting down travel and in-person experiences, Disney pivoted and added streaming via Disney + . Now that impact of the pandemic is reduced because of availability of vaccinations, and the world is reopening, their theme parks and cruise lines should rebound well. Add in potential revenues from sports betting, the share price is ready to rocket!
The share price is 25% off of their recent highs of $203. There was a support level of $170 that they weren’t able to maintain. The next support level that I see is $154 and if that can’t be maintained, the next level of support is at $137. I have a price target of $205 for Disney. I am bullish on Disney at $154 and will be looking to add to my portfolio. I have short term positions in Disney and long equity positions in Draftkings.