Disney shares fell on Monday after Barclays analysts downgraded the media and entertainment company's rating and price target, citing weaker growth from its Disney+ streaming service.
Disney's growth story appears to be faltering heading into the final months of the year, according to Barclays analyst Kannan Venkateshwar, who downgraded his rating to 'equal weight' from 'overweight' and decreased his price objective by $35 to $175 per share.
“Disney+ growth has slowed significantly, In order to get to its long term streaming sub guide, Disney needs to more than double its current pace of growth to at least the same level as Netflix", Venkateshwar said, "long term streaming guidance could be at risk.” He added.
In pre-market trading on Monday, Walt Disney shares fell, bringing the stock's year-to-date loss to approximately 4.3 %.
On November 10, Disney will release profits for the fourth quarter of its fiscal year, which concluded in September, as well as an update on the growth rate of its Disney+ streaming service.
The company announced on August 12 that overall subscribers to its Disney+ service had reached 116 million at the end of the third quarter, up from 12.4 million in the previous three months, despite the fact that much of that growth came from lower-margin markets overseas, such as India, through its Hotstar offering.
In the wake of COVID-related attendance limitations in the United States and elsewhere, media sales increased 18 % to $12.7 billion, while theme park revenues more than tripled to $4.34 billion.