Despite the bearish stance, the firm did raise Disney's price target from $165 to $185. Disney shares were down 2.6% to $171.15 in trading Monday.
"We believe improved vaccination rates could help DIS continue to be a solid 're-opening' play, but with considerable multiple expansion recently for both initial vaccine news and the direct-to-consumer (DTC) investor day, we feel the sidelines are more appropriate," analyst Daniel Salmon wrote.
The news isn't all bad for Disney, however, as the company's Disney+ subscriptions are well ahead of schedule and that is "the most important data point of the day," according to BMO.
But the foundation of the firm's expectation that Disney+ subscriptions will top 200 million by 2024 is all the new content Disney plans to place on the service, which it expects to eventually be supported by new price increases in the U.S. and Europe.
BMO now prices Disney's DTC business, including Disney+, ESPN+ and Hulu, at $120 per share, up from $100 per share. Disney's core business remains worth $65, according to BMO, for a total price target of $185 per share.
All told, BMO expects Disney+ to have between 230 million and 260 million subscribers by 2024, up from its previous view of between 60 million and 90 million subs.
By the end of 2025, the firm expects average revenue of $7.05 per user on the company's 275.8 million projected subscribers.
"To be sure, the Disney+ sub forecasts surpassed the most bullish expectations, and were supported by an incredible amount of new content. But our favorite 'story' stock closes out this recommended chapter between DTC investor days nevertheless," Salmon said.