Disney Shares Tumble After Guggenheim Downgrade

© Reuters.

By Sam Boughedda — Walt Disney Company (NYSE:) fell 3.5% Friday after analysts at Guggenheim downgraded the stock based on the pace of its profit growth. 

Analyst Michael Morris downgraded Walt Disney shares to neutral from buy, setting a price target of $165, down from $205.

Morris explained the downgrade resulted from their updated view of the “pace of profit growth at the company’s direct-to-consumer and parks businesses, which is now below consensus through fiscal 2024.”

The analyst also cited Disney’s digital growth challenges, parks trend volatility and cost inflation as further reasons for the lower rating.

“We do see positive business signs, including ahead of consensus F1Q22 Disney+ subscriber additions (our 10mm versus consensus 6.8mm) bolstered by Hulu + Live bundling. However, broader business pressure has us revisit our target 12-month valuation, now at $165 as detailed within,” Morris said.

Disney stock is down more than 14% in the last three months.

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