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In a note sent to clients, the analysts outlined 5 reasons why they are cautious on Disney stock, namely:
1) “DIS Domestic Parks expectations appear high;
2) DIS DTC subscriber growth has stalled, and DIS has failed to differentiate its DTC churn vs. peers;
3) ESPN moving to streaming is materially harder than we initially thought, as our survey work shows low willingness to pay;
4) Structural changes in content distribution have resulted in DIS content sales segment business that is unlikely to make money for the foreseeable future; and
5) We worry the 2024 financial setup feels a lot like 2023.”
As a result of these concerns, the analysts have preferred to go to the sidelines amid “meaningful uncertainty.”
“[We] wait for further catalysts, as buying the dip has been a losing trade,“ they added.
Disney shares fell 0.6% in pre-market Thursday. The stock is up just 2.2% year-to-date.
