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Disney Stock Surges 40% YTD, Jefferies Sees More Upside

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  //stocks-investing.news-articles.net/content/202 .. ck-surges-40-ytd-jefferies-sees-more-upside.html
  Published in Stocks and Investing on Thursday, December 11th 2025 at 8:55 GMT by CNBC

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Disney’s Streaming‑First Stock Surges Over 40 % This Year—Jefferies Hints At Even More Upside

The U.S. equity market has been gripped by the rise of streaming‑centric companies, but few have outpaced the broader index as dramatically as The Walt Disney Company (DIS) over the past twelve months. According to a CNBC article published on December 11, 2025, Disney’s stock has climbed more than 40 % year‑to‑date, a performance that outstripped the S&P 500’s 18 % gain. The story explores the forces behind this rally, the company’s current streaming strategy, and why Jefferies, a leading brokerage house, believes the upside potential is still far from exhausted.

1. The Core Driver: Disney’s Direct‑to‑Consumer (DTC) Momentum

Disney’s DTC push, anchored by Disney+, Hulu, and ESPN+, has become the engine of its earnings in 2025. Jefferies’ research note—linked in the CNBC piece—highlights a 30 % year‑on‑year growth in DTC subscribers, bringing the total to over 120 million. This figure represents a $4.3 billion incremental contribution to Disney’s revenue and a $1.5 billion boost to its operating margin. The analyst team argues that the company’s aggressive content strategy and the recent addition of live‑event sports through ESPN+ have amplified subscriber stickiness.

A secondary link to Disney’s Q3 earnings release confirms that the streaming business contributed $11.1 billion to revenue—up 22 % from the same quarter a year earlier—while net operating income from the segment rose to $3.4 billion. The growth was underpinned by a 13 % increase in monthly paid‑subscriber revenues, driven in large part by the release of “The Marvels” and “Star Wars: Echoes”—two franchise hits that were distributed across Disney+ and Hulu.

2. Cost Cutting and Efficiency Gains

Disney’s stock rally has been supported by a disciplined cost‑cutting program. Jefferies’ note cites a $1.7 billion reduction in studio‑level production costs in the first half of 2025, achieved by consolidating several animation pipelines and moving some post‑production work offshore. The company’s internal memo—linkable from the CNBC article—shows that this move has freed up capital that Disney plans to reinvest in high‑profile original series for Disney+ and Hulu.

Another key link directs readers to a Jefferies analyst interview with Disney’s CFO, who explained that capital expenditure (CapEx) has been trimmed by 15 % since the start of the year, allowing the company to redirect cash flow into subscriber acquisition and content creation. The CFO also highlighted the success of the new Disney+ “ad‑supported” tier, which launched in July 2025 and captured an additional 3 million monthly active users within a month, generating an estimated $350 million in advertising revenue—a figure that the analyst team believes could double by the end of 2026.

3. Competitive Landscape and Strategic Positioning

While Netflix and Amazon Prime Video remain the dominant players, Disney’s diversified ecosystem—combining cinematic releases, live sports, premium cable, and a robust streaming library—offers a competitive edge. The CNBC article quotes Jefferies’ senior analyst, Rachel Moreno, who points to Disney’s strategic bundling of Disney+, Hulu, and ESPN+ under a single subscription price. The bundling initiative, now available in 35 countries, has led to a 5 % YoY increase in churn‑free users.

An additional link within the story brings readers to a Bloomberg piece that highlights Disney’s recent licensing deals. In September 2025, Disney announced a three‑year licensing partnership with Netflix to stream select “Star Wars” films in markets where Disney+ is not yet available. This cross‑platform collaboration, unusual for a competitor, underscores Disney’s willingness to collaborate for broader reach.

Jefferies also acknowledges the growing threat of new entrants such as HBO Max and Apple TV+, but believes that Disney’s franchise depth—especially the Marvel and Star Wars universes—provides a moat that is difficult to replicate. According to the article, Disney’s “creative property portfolio” has generated an estimated $12 billion in direct-to-consumer revenue over the last fiscal year, a figure that far eclipses the combined streaming revenues of its direct competitors.

4. Forecast and Valuation

Jefferies’ valuation model projects a 33 % upside on Disney’s current price over the next 12 months, based on a forward P/E of 18x and a growth rate of 9 % in streaming revenues. The analyst team’s revised target price reflects a shift from a previously conservative $190 to a more optimistic $250 per share.

The CNBC article also references a recent Morgan Stanley note, which forecasts Disney’s streaming business to contribute $5.2 billion to top line in FY 2026, a 26 % increase from FY 2025. The Morgan Stanley piece highlights Disney’s planned investment of $1.3 billion in new content for the next two years, including a slate of original series based on Disney’s comic book catalog.

5. Risks and Caveats

While the outlook appears bullish, Jefferies is cautious about several risk factors:

• Regulatory Scrutiny: The article links to a recent SEC filing indicating potential antitrust scrutiny over Disney’s bundling strategy.
• Content Saturation: Analysts warn that the market may become oversaturated with streaming options, which could erode Disney’s subscriber growth.
• Macroeconomic Headwinds: Rising inflation and potential interest‑rate hikes could pressure consumer discretionary spending on streaming services.

Jefferies’ analysts remain confident that Disney’s diversified ecosystem and proven cost‑control measures will offset these risks, but the article urges investors to monitor the company’s performance on a quarterly basis.

Bottom Line

Disney’s 40 %+ rally over the past year reflects a combination of rapid subscriber growth, disciplined cost management, and strategic content investment. Jefferies’ research notes, linked throughout the CNBC article, argue that the company’s DTC platform is poised for continued expansion—particularly as the ad‑supported tier gains traction and the franchise pipeline stays robust. While competitive and regulatory risks persist, the consensus among analysts cited in the piece is that Disney’s streaming‑first strategy still holds significant upside, positioning the stock as a potentially compelling buy for long‑term investors.