Disney got more bad news this week as KeyBanc Capital Markets downgraded its stock over fears of plummeting attendance in theme parks and stalled growth in the streaming services of the woke company and Hulu.

(Video Credit: CNBC Television)

“While Disney appears less expensive versus its historical average, we believe the stock is unlikely to work until a number of items have line of sight to being resolved,” analysts led by Brandon Nispel ominously commented on Wednesday, according to Barron’s.

KeyBanc analysts lowered Disney’s rating from overweight to sector weight last week which resulted in its stock price falling even further.

“While this note might call the bottom, we have our doubts,” Nispel stated.

According to CNBC Television, there are five reasons being cited to “step aside” from Disney stock:

1. Domestic park expectations are too high.
2. DTC sub-growth has stalled.
3. Survey shows low willingness to pay for ESPN streaming.
4. DIS content sales segment business is unlikely to make money for the foreseeable future.
5. We worry the 2024 financial setup feels a lot like 2023.

Disney’s stock was downgraded this week by investment advisory company KeyBanc Capital Markets over fears of stalled growth at its Disney+ and Hulu streaming services and lower attendance at its theme parks, according to reports.

— Robert Bradley Jones (@RobertBradleyJ2) July 5, 2023

In late 2021, Disney’s stock was nearly $200 a share. After woke policies and a failure to consider who their actual demographic target audience is, the stock now resides at $89.28 as of last Friday. As the company pushes a pro-gay, pro-transgender agenda things are only likely to get worse.

Go woke… go broke.. Disney stock continues to slide .. in 2020 the stock was $195 a share now its hovering around $85.. .. attendance is down at Disney World and Disneyland …the last four woke movies from Disney tanked… they’ve laid off close to 8,000 people …. pic.twitter.com/567rc5zPAE

— Random LGBFJB (@agiletopper) July 1, 2023

“We prefer to step aside, acknowledging meaningful uncertainty, and wait for further catalysts, as buying the dip has been a losing trade,” Nispel remarked via a client note Wednesday, according to CNBC.

In order to bounce back, KeyBanc believes that Disney would have to raise prices for current Disney+ and Hulu customers and present strategies to retain those same customers such as a tiered system for those wanting to pay less in a model that echoes Netflix and other providers. That is likely to cause people to leave the service in a domino effect for the company. Disney+ shed 4 million subscribers in its fiscal second quarter following recent price hikes, according to Yahoo Finance.

“While DIS has started to drive pricing, we have yet to see DIS services separate from peers from a churn standpoint…, though it arguably has had a bundling advantage,” Nispel contended. “We believe this speaks more to the structural element of churn within the industry that is unlikely to go away.”

Woke theatrical releases such as “The Little Mermaid,” “Elemental,” “Lightyear,” and “Strange World” that fixate on race and LGBT issues are not drawing crowds either, according to CNBC.

Nice job Disney……glad that I sold your stock when you picked a fight with DeSantis and went woke. pic.twitter.com/dZ15qU3IPY

— Carnivore (@waterviewdoc) June 26, 2023

Nispel titled the section on Disney films in his note, “Are the days of $200M+ productions done?”

He pointed out that Disney may need to “fundamentally rethink its content creation strategy.”

“Disneyland growth due to its 100th anniversary celebration is more than offset by [Walt Disney World’s] contraction from comparisons against its 50th anniversary celebration. We worry the ‘tough comps’ are not properly reflected in consensus,” the analyst wrote.

Nispel added that the company’s new labor contract in Florida, coupled with the accelerated depreciation of the Starcruiser hotel, will further pressure margins and cause more problems for the House of Mouse.

Don’t you wonder what stockholders invested in these “woke” companies are thinking about watching their investments being flushed down the toilet by the decisions of a handful of woke DEI zealots? I sold my Disney stock in 2021 because I could see the handwriting on the wall!

— Debby Maule (@debby_maule) July 5, 2023

Disney destroyed their IPs – Marvel, Star Wars, Indy. Only reason their stock is still up is the large instutions (BlackRock & Vanguard) trying to salvage their ESG/DEI propoganda machine.

— JustLaw117 (@JustLaw117) June 30, 2023

$DIS $WALT $DISNEY $STOCK

Key support range low pic.twitter.com/y9EmFUzEcE

— J.G-Trading (@JG_traders) July 3, 2023

And ESPN is turning into somewhat of an anchor for the company that is pulling them down. The outlet will have to raise subscription fees massively to stay afloat.

“Who’s going to pay $30+/month for ESPN? Not many,” Nispel asked. “From our survey work, we found consumer interest in sports is relatively high in linear, though willingness to pay in streaming is low: we found >25% of subscribers would not be willing to pay for a pure sports streaming service, 46% of subscribers would be willing to pay <$10/month, and 26% would pay >$20/month.”

He predicted a “deceleration of revenue” between the third and fourth quarters despite Disney’s bullish expectations, according to CNBC.

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