KeyBanc analyst ‘prefers to step aside’ from Disney stock: explore why

Walt Disney Co (NYSE: DIS) is roughly flat for the year at writing but a KeyBanc analyst still doesn’t find it an attractive buying opportunity.

Reason for the dovish call on Disney stock

On Thursday, Brandon Nispel downgraded the mass media company to “sector weight”. He doesn’t have a price objective on it, though.

The analyst turned dovish on Disney stock primarily because he sees expectations of its theme parks as too high particularly considering the tougher comps ahead.

He also noted that the data for its domestic theme parks was weak for the past two months straight. Nispel expects Disney to report a deceleration in its revenue in the third and fourth quarter.  

Disney is facing challenges in DTC as well

The KeyBanc analyst also warned of a potential decline in the total number of subscribers at Disney+ and Hulu in its current financial quarter.

He downgraded the Disney stock today also because the demand for ESPN or sports in general appears to be not as resilient on streaming as it is on linear TV, as per the KeyBanc research.

Nispel sees the need for Disney to better monetise the subscribers it already has via price hikes. The Burbank-headquartered multinational is expected to report its third-quarter financial results in early August.