Disney’s stock has fallen amid concerns about decreasing attendance at its theme parks and a stalled streaming audience. KeyBanc Capital Markets analysts lowered Disney’s rating from overweight to sector weight, causing its stock price to drop. “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,” the analysts said.
The main concerns are low theme park attendance, but also what analysts consider the overpriced cost to consumers of a new ESPN streaming service, overly-optimistic profit predictions on movie releases, and the need for more subscribers to channels including Disney+ and Hulu. The company’s stock was worth $200 in late 2021 but has now dropped significantly to $89.28.
Entertainment giant Disney has had a difficult few years and is embroiled in a slew of political controversies that will likely impact its business performance. When Floridian Governor Ron DeSantis introduced the Parental Rights in Education Act, which disallows teachers from discussing adult themes with young children, Disney took an oppositional stand and said it would do all in its power to overturn the legislation. This led to a feud with the Government of Florida that is still ongoing.
Furthermore, several “woke” movies and cartoons have caused the company to endure accusations that it no longer entertains but delivers political lectures to audiences who go to the movies to relax. Several of its most recent releases have bombed at the box office. Since last year, Disney has reportedly lost $300 million on just two films – Strange World and Lightyear.
Both movies are aimed at young children but explore same-gender relationships and other serious themes. One parent left a review online stating if they wanted to discuss grown-up issues with 7 or 8-year-old kids, they would do it at home, not at a movie theatre, and not with the aid of a company that should be providing entertainment and escapism.