The Walt Disney Company slumped 3.5 % on Friday after Guggenheim analysts downgraded the company based on its earnings growth rate.
Analyst Michael Morris lowered Walt Disney stock from buy to neutral, with a $165 price target, down from $205.
The reduction, according to Morris, stemmed from an updated view of the company's "speed of profit growth at the company's direct-to-consumer and parks operations, which is currently below consensus through fiscal 2024."
The analyst also blamed the lower rating on Disney's digital growth issues, park trend instability, and cost inflation.
"We see strong business signals, including Disney+ subscriber growth ahead of estimate in F1Q22 (our 10 million versus consensus 6.8 million), aided by Hulu + Live bundling. However, due to broader business pressures, we've decided to rethink our target 12-month valuation, which is currently $165, as outlined below "Morris stated his opinion.
In the last three months, Disney's stock has dropped more than 14%.