Disney stock is falling because it was downgraded to Neutral from Buy by investment firm Guggenheim Partners. The firm cited the threat of new COVID variants disrupting operations and the entertainment behemoth's increased content spend as reasons for its downgrade. Disney, which reports earnings on Feb. 9, closed trading at $155.44 on Jan. 13.

Analysts at Guggenheim downgraded Disney stock to Neutral from their earlier Buy rating. They also cut the firm's price target on Disney shares to $165 from $205 due to "broader business pressure" Elements of this pressure include higher wages for workers and the threat of future COVID outbreaks.

Disney registered 18% growth in its stock price in 2020. The next year was challenging, however. Subscriber growth at Disney Plus, which had powered almost all its gains during the pandemic shutdown, slowed. New COVID variants interfered with the company's plans to fully reopen other spigots of business revenue.

Of the 17 analysts covering the company, 14 have a "Buy" rating on the stock. Wells Fargo senior analyst Steven Cahall said 2021 was a "rare but clear strategic misstep" He said Disney did not have the level of content that its peers in the streaming business did and that it showed in 2021.
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