Disney‘s shift to pay-television and direct-to-consumer video products will weigh on the stock, thanks to a sizable initial investment and a long lead time to get the offering up and running, an analyst said.

Guggenheim downgraded shares of the media giant and cut its price target, saying investors have unrealistic optimism on content.

Disney unveiled plans for a direct-to-consumer video streaming service during its earnings report in August. CEO Bob Iger explained that Disney would be pulling nearly all of its content from Netflix in the hopes of grabbing a larger piece of the streaming pie. The plan is to introduce it in 2019.

“Our updated outlook reflects our increased caution toward pay-TV ecosystem trends and concern that investor expectations for the financial contribution from the company’s content cycle are too high,” wrote Guggenheim analyst Michael Morris on Thursday. “While we are optimistic that the company’s proposed direct-to-consumer video products will create long-term value, we expect the initial investment and long lead time into the launch of the Disney-branded offering will weigh on sentiment over the next 12 months.”

The analyst set his new price target at $105, down from $122. The new target is 7 percent higher than Wednesday’s closing price. Shares have fallen nearly 8 percent since the announcement that Disney will pull its content from Netflix. The stock fell 1.38 percent in early trading Thursday morning.


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