By Dhirendra Tripathi
Investing.com – Disney stock (NYSE:DIS) fell 2.2% in Monday’s premarket trading after Barclays (NYSE:BCS) downgraded it to equal weight from overweight, citing the likelihood of a significant slowdown in growth at its Disney+ streaming service.
Analyst Kannan Venkateshwar cut the target for the stock by $35 to $175 per share. The shares closed at $176.46 Friday.
For the third quarter ended July 3, Disney+ had 116 million paying customers, more than doubling its base in a year to emerge as a rival to Netflix which had 209 million subscribers at the end of June.
But according to the analyst, the group’s growth story now appears to be weakening as the year nears its last two months. He called the slowdown in Disney+ growth “significant.”
Venkateshwar argues that for Disney+ to get to its long-term streaming subscriber guide, the media giant needs to more than double its current pace of growth to at least the same level as Netflix (NASDAQ:NFLX).
The number one player in the market is now riding on the windfall from Squid Game, the Korean-language series that has caught fire with audiences around the world. Netflix estimates its most-watched original series to create $900 million in value for the company, according to Bloomberg. The show cost just $21.4 million to produce.
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