Credit Suisse expects Disney+ to pull in 20 million subscribers before the end of the year as app downloads level out after a post-launch frenzy and total subscriptions beat expectations.

Analysts at the firm previously expected Disney's new streaming service to finish the year with 14.3 million subscribers.

Despite launching with some technical errors, Disney reported 10 million Disney+ sign-ups one day after launch, sending the stock up 7.35%. Disney also partnered with Verizon before the launch to offer Verizon customers a free year of Disney+. The company has not reported subscriber numbers since the initial report.

"For Disney, we are raising our Disney+ estimate once again to 20.0m as of December 31st from 14.3m due to app downloads settling out at a reasonable level and Verizon indicating Disney+ sign-ups have come in well ahead of expectations (though we left bottom line estimates unchanged)," Credit Suisse analysts said in a note Saturday.

Credit Suisse has an outperform rating on Disney's stock, and in November it placed a 12-month price target of $163 per share, up from a previous target of $150 announced in September.

The analysts said they expect a slow start to 2020 for Disney+ but predict subscriber numbers will climb again after the streaming service launches in Europe on March 31. They expect another pop after the October 2020 launch in Latin America. Bolstered by the successful initial launch, Disney will continue to throw more money behind the streaming service, the analysts expect.

"As with our prior increase, we assume the higher Disney+ subscribers and revenue is offset by management spending more aggressively behind the successful launch," the analysts said.

At $6.99 per month or $69.99 per year, Disney+ is significantly cheaper than competitors such as Netflix, which charges $12.99 for its most popular standard HD plan. It also can be bundled alongside Disney's other streaming services, ESPN+ and ad-supported Hulu for $12.99 a month. The analysts said the bundle has not proven a strong offering, marked by Disney's separate marketing efforts to promote Hulu.

"Hulu reprised a Black Friday promotion again this year with a $2/mo. for 12 months offer for its $6/mo. ad-supported SVOD service," they said. "While up from its $1/mo. promo from last year, this suggests that momentum for the Disney+/Hulu/ESPN+ bundle offering is not strong enough to allow Hulu to ease its own marketing spending."

Disney managed a successful launch of Disney+ in a crowded sector that will only become more competitive in the months to come. In the coming months, AT&T's WarnerMedia will launch HBO Max and Comcast's NBCUniversal will start its first streaming service called Peacock. Apple's streaming service Apple TV+ launched earlier this month, but its library is limited to just a handful of shows.

"Overall, we expect Disney shares have near-term upside if our estimate of 20m+ Disney+ subs by the end of F1Q20 proves accurate," the analysts said.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.