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Disney Stock Slumps After Streaming Growth Stalls After Smolopping Stocks after a slut he grew After Following the Flow - Staggers Following Floats / Until The Sun vs

Disney Stock Slumps After Streaming Growth Stalls After Smolopping Stocks after a slut he grew  After Following the Flow  - Staggers Following Floats / Until The Sun vs

The media giant posted earnings that missed Wall Street expectations and revealed a significant slowdown for Disney Plus.

Disney Plus hit 118.1 million for the quarter ended Oct. 2 up just 2.1 million over the prior period and a gain that fell far short of consensus estimates of about 10 million net adds.

The CEO of Bob Chapek sought to reduce the miss, touting the streamers 60% year-over-year sub growth as a hiccup on the way to Disneying reaching its target of 230 milllion-260 million subscribers by fiscal year 2024, an exec reiterated on Wednesdayt earnings call.

Chapek said that we continue to manage our DTC business long-term, said Chappeki.

The company blamed the Disney Plus slowdown on content-production delays and told investors that the total amount of original releases on Disney will not hit the company's targets until Q4 2022, which will be the first quarter the service will release originals from all of its major brands - Disney, Marvel, Star Wars, Pixar and NatGeo.

In the wake of the disappointing earnings report for the companys fiscal Q4 2021, multiple Wall Street analysts cut their price targets on DisneyS stock.

MoffettNathanson maintained a 'neutral' rating on Disney stock and lowered its 12-month price target from $180 to $175 per share.

When the new content is a flywheel, the analyst writes in sanity. And we wonder whether Disney+ is too narrow to deliver, and requires more investment in non-Disney content to expand the products appeal.

Chapek said Disney would increase content spending on Disney Plus above the 8 billion-$9 billion range previously pegged for FY2024 to expand its programming for international markets.

The company still expects Disney Plus to be profitable by FY24, but the rising investment also makes a difference in the price of the premium streaming business, Nathanson said. The analyst said: The worst kind of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines.

At this point, we would argue that all the aggregate investment in streaming going back to the founding of Hulu or Netflixs pivot from mail-order to Internet delivery has no generated aggregate free cash flow, Nathanson wrote.

During the most recent quarter, revenues at Disneys Parks, Experiences and Products Division nearly doubled to $5.4 billion, whereas operating income swung to $640 million from the $945 million loss reported in the COVID-impact quarter a year earlier.

The company kept its market perform rating on the stock. The firm also cut its price target for Disney shares by reducing its value by $195 to $180.

Dan Salmon wrote a note to investors saying we remain on the sidelines, as long as we know the timing for the recovery of the core business margin, and as soon as there is repercussion of DIS/ESPNs live sports business, we will continue to expand to streaming, according to the statement.