It’s been rough going for Disney (NYSE:DIS) in the last few months. Scuffles with the Florida state government, a declining linear cable market, streaming troubles, and now an actors’ strike all come together to rock the House of Mouse to its foundations. And now, the analysts are turning against Disney. Down fractionally in Tuesday afternoon’s trading, Atlantic Equities took aim at Disney thanks to a variety of negative factors.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Atlantic Equities, by way of analyst Hamilton Faber, cut Disney’s rating from “neutral” to “underweight” for pretty much all the same reasons we just listed, and which we’ve all seen happening for months. Faber also cut the price target substantially, dropping it from $113 to $76. TV advertising, an increasingly competitive streaming market, and an uncertain macroeconomic environment where disposable income is in somewhat shorter supply than normal all add up to bad news as far as Faber—and the rest of us—are concerned.
Faber particularly noted that advertising rates are likely to drop a lot harder than normal, thanks to a combination of increased streaming, cable cutting, and a lack of normal pricing gains. Things get worse from there, however. The actors’ and writers’ strikes are still hitting, and prompting Disney to change their movie release schedules to prevent a lot of dead air. That will mean plenty of disappointed movie-goers forced to wait longer for their favorites. Furthermore, the theme parks aren’t doing much better; attendance is down sufficiently to create disturbing pictures of mostly-empty paths. The unexpected evacuation of The Land at EPCOT only added to the chaos.
All that together has left analysts a bit shaken. With 13 Buy ratings, five Holds and two Sells, Disney stock is considered a Moderate Buy. Nevertheless, with an average price target of $117.29, Disney stock offers investors 36.07% upside potential.
