<p>Shares in Walt Disney Co tumbled 11% to the lowest since March 2020 on Wednesday, as ballooning costs at the entertainment giant's fast-growing streaming division cast a shadow on strong subscriber additions.</p>.<p>Disney+ has attracted millions of subscribers and will launch an ad-supported tier next month, but executives' promise of profitability next year and forecast for operating results in the next quarter failed to impress.</p>.<p>The company missed analysts' expectations for fiscal fourth-quarter earnings, after a $1.5 billion loss in its streaming division.</p>.<p>"Disney's streaming results are indicative of the tightrope it is walking," said Fred Boxa, associate director at technology and management consulting firm Arthur D. Little.</p>.<p>Finance chief Christine McCarthy, in a call with analysts on Tuesday, said the ad tier was not expected to provide a meaningful impact to results until later in Disney's financial year.</p>.<p>Subscriber growth in Disney+ was expected to accelerate in the second quarter, she added, a sign analysts said indicated a soft first quarter.</p>.<p>"As the platform aims for profitability, it's placing some of that burden on its user base in the form of price hikes that could stall growth during a time of economic pinch," said Mike Proulx, research director at Forrester.</p>.<p>A weaker-than-expected full-year revenue growth forecast also dragged shares. Disney estimated a "high single-digit" percentage growth in revenue in this fiscal compared to the last, while the Street was expecting 12% growth.</p>.<p>At least 13 brokerages cut their price targets on Disney stock.</p>.<p>Credit Suisse analysts, who by far had the steepest cut of $31, said "the streaming investment cycle coinciding with macro weakness is certainly testing Disney investor patience."</p>.<p>The median price target on the stock is $125, according to Refinitiv data.</p>.<p>Shares hit $88.40 on Wednesday. They have fallen more than 35% this year, compared with a 20% drop in the S&P 500, battered by a cautious outlook for ad sales and recessionary fears.</p>
<p>Shares in Walt Disney Co tumbled 11% to the lowest since March 2020 on Wednesday, as ballooning costs at the entertainment giant's fast-growing streaming division cast a shadow on strong subscriber additions.</p>.<p>Disney+ has attracted millions of subscribers and will launch an ad-supported tier next month, but executives' promise of profitability next year and forecast for operating results in the next quarter failed to impress.</p>.<p>The company missed analysts' expectations for fiscal fourth-quarter earnings, after a $1.5 billion loss in its streaming division.</p>.<p>"Disney's streaming results are indicative of the tightrope it is walking," said Fred Boxa, associate director at technology and management consulting firm Arthur D. Little.</p>.<p>Finance chief Christine McCarthy, in a call with analysts on Tuesday, said the ad tier was not expected to provide a meaningful impact to results until later in Disney's financial year.</p>.<p>Subscriber growth in Disney+ was expected to accelerate in the second quarter, she added, a sign analysts said indicated a soft first quarter.</p>.<p>"As the platform aims for profitability, it's placing some of that burden on its user base in the form of price hikes that could stall growth during a time of economic pinch," said Mike Proulx, research director at Forrester.</p>.<p>A weaker-than-expected full-year revenue growth forecast also dragged shares. Disney estimated a "high single-digit" percentage growth in revenue in this fiscal compared to the last, while the Street was expecting 12% growth.</p>.<p>At least 13 brokerages cut their price targets on Disney stock.</p>.<p>Credit Suisse analysts, who by far had the steepest cut of $31, said "the streaming investment cycle coinciding with macro weakness is certainly testing Disney investor patience."</p>.<p>The median price target on the stock is $125, according to Refinitiv data.</p>.<p>Shares hit $88.40 on Wednesday. They have fallen more than 35% this year, compared with a 20% drop in the S&P 500, battered by a cautious outlook for ad sales and recessionary fears.</p>