Why Did Macquarie Just Downgrade Disney?

Walt Disney Co (NYSE: DIS) was downgraded by Macquarie Research to "Neutral" from "Outperform" on Tuesday. The firm set a $100 price target on the stock. The stock is down by 1.90 percent to $101.01 in mid-afternoon trading on Tuesday.So why did Macquarie downgrade Disney?Walt Disney had been downgraded for the most part over the firm having difficulty pushing the stock at a high valuation, after its "key catalyst – Star Wars – has passed", and the increased "cord-cutting fears at ESPN."Macquarie sees no resolution in cord-cutting fears at ESPN."2016 will likely be a year of fits by investors over what happens to the bundle, and starts as more skinny bundles and direct-to-consumer OTT services come to market," Macquarie Research noted. "We don't think the economics of these fragmented offerings will drive incremental growth for some time, if at all, but they could offset the decline somewhat," the firm commented."Hopeful" for big movies in 2016.Big movies still are significant, as there has been a 7 percent rise in the US box office in 2015. Macquarie sees 2016 having major Disney offshoots from The Avengers and Star Wars franchises, along with first DC Comics releases from Warner Brothers.The downgrade by on Tuesday after the release of Star Wars: The Force Awakens had passed is challenging, the firm noted.Macquarie also released a separate note on Monday commenting that "Star Wars was great," however ESPN's "pay TV concerns" still won't go away.Disney's valuation is stretched."For all this DIS trades at >18x F2016 PE, a significant premium to peers at 12x, and a premium to its 5- and 10-year averages of 16.5x and 15.8x," according to Macquarie.