The rest of the world is gripped by “Star Wars” mania, but Disney investors need to snap out of the company’s Jedi mind trick, one analyst said Friday.
BTIG analyst Rich Greenfield downgraded his rating on Disney shares Friday, recommending clients sell the stock just a day after “Star Wars: The Force Awakens” was greeted in theaters on Thursday night with a record $57 million from fans, who are also responsible for record-breaking presales.
Greenfield’s gripe is ESPN, which he said overpaid for individual sports-rights packages and acquired too many them in order to stunt new competitors like Fox Sports 1 and NBC Sports. Disney’s cable channels will drag the company’s profitability below Wall Street estimates, he said.
Unless “The Force Awakens” exceeds $2 billion in worldwide box office revenue, Disney will fall short of both BTIG’s and the consensus estimate for earnings this fiscal year, he added.
“The Force Awakens” would need to be the most successful film in six years for Disney to hit BTIG’s threshold of profitability. “Avatar,” released in 2009, is the highest grossing movie of all time at $2.78 billion, followed by “Titanic” at $2.18 billion. This year’s “Jurassic World” has grossed $1.66 billion worldwide.
Disney shares were down 3.1 percent, or $3.45, at $108.56 in recent trading.