Disney stock falls on downgrade despite "Star Wars" debut

LOS ANGELES - Record-setting results from "Star Wars" aside, Disney (DIS) shares fell faster than the market slump Friday after an analyst downgraded the company, saying it has paid too much for sports rights and that its actions will accelerate cord-cutting.

BTIG analyst Rich Greenfield cut Disney stock to "sell" from "neutral" and set a target price of $90.

In afternoon trading, Disney shares were down 3.7 percent, or $4.12, at $107.89. That was worse than the 1.7 percent decline in the Dow Jones industrial average.

Greenfield argues that its flagship ESPN network paid too much for sports rights in an effort to thwart rivals Fox Sports 1 and NBC Sports, which will trim profitability at cable network operations that represent 44 percent of Disney's operating income.

Further, he says Disney's licensing of key content to Netflix has "further damaged their and the cable network industry's long-term prospects."

Disney's Marvel has licensed original series such as "Jessica Jones" and "Daredevil" exclusively to Netflix. Starting late next year, newly released Disney, Marvel and Pixar films will also play on Netflix after Disney's movie output deal with premium TV channel Starz expires.

That could give TV viewers further reasons to drop or trim their traditional pay TV packages and rely on online services for their entertainment, which are seen as less lucrative for media companies.

The downgrade comes the same day "Star Wars: The Force Awakens" was estimated to bring in a record $57 million from U.S. and Canadian theaters shortly after its debut, adding to the $72.7 million raised overseas.

Greenfield said while "Star Wars" will help drive up studio revenues 16 percent in the fiscal year through next September, high expectations are baked into forecasts and it needs to bring in more than $2 billion worldwide to meet Wall Street forecasts.