Disney Stock Shares Tumble After Last Week’s Analyst Downgrade

With high-profile movies like Pixar’s Encanto, Marvel’s Eternals, and 20th Century Fox’s West Side Story failing at the box office, Disney has begun heavily investing heavily in streaming entertainment again. Pixar’s Turning Red will now launch exclusively on Disney+ in March, foregoing theaters entirely in a bid to boost streaming subscriptions.

According to Disney’s most recent annual report, the studio aims to spend up to $33 billion on content in the coming year. This is an increase of $8 billion over the previous fiscal year, when Disney estimated it spent almost $25 billion on content. Disney claims that the increase in spending is due to their expansion of streaming entertainment.

But the streaming investment may be hurting its theme park investments. As David Ng of Breitbart reports, the company’s stock shares are plunging on the news that theme park recovery after the pandemic is slower than expected.

The Walt Disney Co. saw its shares plunge nearly 4 percent in morning trading Friday after an analyst downgraded the stock, citing slower-than-expected recovery at the company’s theme parks and higher-than-expected spending on streaming and traditional TV content.

Guggenheim Partners analyst Michael Morris downgraded Disney to “neutral” from “buy” and cut his target price to $165 from $205, according to multiple reports. He warned about the “pace of profit growth at the company’s direct-to-consumer and parks businesses, which is now below consensus through fiscal 2024.”

Disney’s theme parks will likely see a slower recovery due to continued effects of the coronavirus pandemic, he said, as the parks division will be “impacted by heightened attendance restrictions and consumer caution.”

No comment is made on the fact that most people are over the pandemic, but Disney’s theme parks are still very restrictive on crowd sizes and mask wearing. No comment is made as to how the studio has pushed away half the country by coming out against state rights in regards to voter security measures or abortion rights. No comment is made as to how poorly the Disney has handled their Star Wars properties, not only by subverting fan expectations and inserting identity politics into the movies and comics, but also firing conservative firebrand Gina Carano and their totally tone deaf and overpriced Star Wars: Galactic Starcruiser, with aesthetics you could have found in Buck Rogers in the 25th Century TV show sets. The whole enterprise has become woke.

CEO Bob Chapek recently sent out a memo to staff earlier this month outlining the three pillars the studio plans to focus on most moving forward. The first of the three was “storytelling excellence,” which the studio has failed to manage to do with their last few Star Wars outings.

The second pillar is “innovation,” which Chapek writes should leverage the company’s “franchise ecosystem.”

“Since Steamboat Willie, we have been the world’s foremost innovative storytellers,” Chapek wrote. “That must continue as technology evolves, giving our creative teams new canvases like the metaverse on which to paint.”

The final pillar is a “relentless focus on our audience,” and placing consumers as the company’s “North Star.” Disney’s evolving theatrical and streaming strategy appears to play a critical role in that area. “We must evolve with our audience, not work against them.”

There was no mention of how Disney executives have elevated the ideology of critical race theory into a new corporate dogma, bombarded employees with trainings on “systemic racism,” “white privilege,” “white fragility,” and “white saviors,” and launched racially segregated “affinity groups” at the company’s headquarters. A recent trove of whistleblower documents related to Disney’s “diversity and inclusion” program, called “Reimagine Tomorrow,” painted a disturbing picture of the company’s embrace of racial politics and the company culture has become deeply politicized, engulfing parts of the company in racial conflict.

Walt Disney’s original focus used to be on clean, fun, family entertainment which made the company a favorite of conservatives. Then it got ‘woke’.  That wokeness, more than bad movies and expensive theme parks, may be what hurts their bottom line the most. Streaming ain’t gonna save them.