AMC Networks' Stock Slumps To 1 1/2-year Low After Morgan Stanley Downgrade

Shares of AMC Networks Inc. slumped 1.9% in afternoon trade Wednesday, after the cable TV network operator was downgraded at Morgan Stanley, citing disappointing new-show launches. The stock was on track to close at the lowest level since Oct. 20, 2014. Analyst Ryan Fiftal cut his rating to equal weight, after being at overweight for the past 10 1/2 months. He slashed his stock price target to $65, which is 11% above current levels, from $78. Fiftal said viewership of all three major new shows launched this year--"Night Manager," "Preacher" and "Feed the Beast"--was about 50% below what he expected, on average. In addition, ratings on the network's biggest hit of 2015--"Fear the Walking Dead"--declined 40% this year. "Light viewership of new originals highlights the challenge of replacing 'The Walking Dead,'" Fiftal wrote in a note to clients. "Additionally, AMC Network's new schedule was front-half loaded this year, so while recently launched "Preacher" might still build and audience over time, we see limited potential for a major new hit until "The Son" and "The Terror" premiere in 2017." The stock has tumbled 22% year to date, while the S&P 500 has tacked on 2.2%.