The Downgrade That Sent Disney Shares Lower

• Shares of Walt Disney Co (NYSE: DIS) lost nearly 3 percent Friday morning.
• Rich Greenfield of BTIG downgraded Disney's stock to Sell.
• The analyst expressed caution over the latest "Star Wars" film and ongoing concerns surrounding ESPN.

While "Star Wars" fanatics are lining up to view the new film release, Disney investors are reacting a report from Rich Greenfield of BTIG as he moved to the "dark side" with a Sell rating. The analyst has a $90 price target on the stock. Shares traded as low as $108, and recently traded around $109.35, down 2.3 percent.

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Despite the "Star Wars: The Force Awakens" release, and upcoming Marvel and Pixar films, investors need to keep in mind that at its core, Disney is a cable network, Greenfield argued. The analyst added that Disney's ESPN segment has the highest level of fixed costs in the entire industry and this should be of concern to investors.

Greenfield said that over the past 20 years, ESPN has been viewed as the "crown jewel" of Disney's "empire." However, this has quickly changed as ESPN is now Disney's "most troubled business" given the ongoing "cable-cutting" trend.

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Greenfield further suggested that ESPN is not in a position to offer an over-the-top box that would allow cord-cutters to pay for ESPN's programming. The analyst stated that Disney and ESPN need to offer a "far broader" content offering before it can be offered as a stand-alone or over-the-top offering.

Greenfield argued that Disney's most recent "Star Wars" release needs to exceed $2 billion in worldwide box office revenue in order to meet his fiscal 2016 earnings estimates. According to Fortune, industry analysts are currently projecting the movie will make anywhere from $1.5 billion to $2 billion in global box office sales.