Disney has received a downgrade from Barclays amid fears of streaming subscriber slowdown.
This is the first time in three years that Disney’s stock has been downgraded.
While Disney+ has exceeded expectations since its launch in Q4 2019, CEO Bob Chapek last month said that its Q4 2021 subscribers will grow by “low single digit” millions. Across its SVOD portfolio, which includes Disney+ and Hulu, Disney has added 58.5 million subscribers in the year so far.
However, Barclays analyst Kannan Venkateshwar has said that Disney+’s slowdown in growth cannot be solely attributed to the pull-forward effect of the Covid-19 pandemic. The analyst noted that its approach to content may be providing diminishing returns: “While the company appears to be targeting one new piece of content a week, not every piece of content has the same franchise value or visibility.”
The report goes on to state that Disney will need to more than double its current pace of growth to at least the same level of Netflix if it is to reach its target of 230-260 million subs by the end of 2024.
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