Analysts Discuss Disney Assuming Complete Control Of Hulu

Walt Disney Co DIS on Tuesday assumed full control of Hulu and will buy Comcast Corporation CMCSA's 33-percent stake within five years.

Guggenheim: Comcast's 'Balancing Act'

Comcast's deal with Disney is akin to a "balancing act" as the company is exploring the high-margin licensing revenue with Hulu with the future revenue potential of its own NBCU app, Guggenheim's Mike McCormack wrote in a research report. Comcast wants to retain flexibility as the deal with Disney extends Hulu's license of NBCU content through 2024.

At the same time, Comcast has the option to end any exclusive content for Hulu in one year so it can add content to its own streaming service. After three years Comcast can completely put an end to most of its content agreements with Hulu, which McCormack said gives management "significant flexibility" in evaluating how to best monetize content on its own app.

McCormack maintains a Neutral rating on Comcast's stock with a $39 price target.

Tigress: Disney The 'Undisputed King' Of Content

Disney's soon to be launched streaming video service is likely to include access to Hulu and ESPN+ as part of a "very broad and compelling" streaming platform, Tigress Financial Partners' Ivan Feinseth wrote in his daily newsletter. Disney already holds the status as being the "undisputed king" of content given its deep portfolio of brands and franchises so its streaming platform will leverage its "incredible content" library.

Disney's streaming platform is likely to be a "significant" driver of revenue over time, according to Feinseth. Coupled with the continued success in Disney Studios and Theme Parks, the stock has plenty of upside potential.

Price Action

Disney shares traded around $132.62, while Comcast traded around $42.66

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