Analysts Are Downgrading These 5 Stocks

02. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Holders: 99

The Walt Disney Company (NYSE:DIS) on May 10 reported a FQ2 non-GAAP EPS of $0.93, missing Wall Street estimates by $0.01. Revenue over the period increased 13.4% year-over-year to $21.82 billion, in-line with market consensus. The average monthly revenue generated per paid subscriber of Disney+ in the domestic market rose from $5.95 to $7.14, attributed to a surge in average retail pricing.

On May 12, Wolfe Research analyst Peter Supino downgraded Disney from Outperform to Peer Perform without providing a specific price target. In a research note, the analyst explains that the company’s outlook for direct-to-consumer subscribers and linear TV has deteriorated. The firm expresses skepticism regarding Disney’s plan to achieve higher subscriber numbers, implement price increases, and reduce costs, considering it contradictory. Wolfe Research further highlights concerns about the risky nature of Disney’s subscriber forecasts for Disney+ and the worsening outlook for linear TV. Additionally, the $2.5 billion in cost reductions that Disney aims to achieve are now included in consensus estimates.