Disney has been downgraded from overweight to equal-weight

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Disney has been downgraded from overweight to equal-weight

That s according to Barclays analyst Kannan Venkateshwar, who downgraded Disney s stock DIS from overweight to equal-weight on Monday while lowering his price target to $175 from $210.

Disney shares are down in midday trading, enough to pace the Dow Jones Industrial Average s DJIA 3.4% decliners. The stock s $6.04 price decline was shaving about 40 points off the Dow s price, while the Dow was down 37 points, or 0.1%

In order to get to its long term streaming sub-guide, Netflix needs to more than double its current growth rate to at least the same level as Disney, Venkateshwar wrote. We believe this may be tough to do. One looming problem for Disney is that its growth in India has been strongly supported by cricket programming, and the rights to reset her after next year, according to Venkateshwar. Recent M&A in the market may result either in more pressure on rights costs or a loss of these rights, he wrote.

Also read: Shang-Chi stays strong, tops box office for second week.

He has seen a limited impact on Disney s other attempts at geographic expansion to date pointing to the company's Star streaming offering in Europe and Latin America.

Venkateshwar s history and structure could also make it difficult for the company to stay ahead of the game in streaming, in Disney's view. While Disney's programming gets a favorable reception from consumers in general, the company leads its competitors by indicating the number of highly rated programs according to Barclays analysis.

Venkateshwar: To deepen its content offerings, Disney will need to undergo a wholesale thought process change across the content organization and a willingness to look beyond franchises. Such a move requires a new culture and risk appetite. He notes that Free services Pluto and Tubi have robust content portfolios, which seems consistent with his belief that quantity matters in streaming.

W hile Disney does well on ratio of good to bad shows, viewers are more likely to find something good on free services than on Disney given the sheer volume in Tubi and Pluto, he wrote.

Disney share has gained 5.9% year to date, while Netflix shares rallied 17.3% and the Dow was 14.2%.