AMC Networks Shares Hit By ‘Walking Dead’ Ratings Drop, But Is It Overkill?

A grave concern? Not yet — but Wall Streeters clearly were disappointed today to see that Sunday’s Season 6 premiere audience numbers for AMC’s hit The Walking Dead came in 15% lower than last year’s with 14.6 million total viewers and a 7.4 rating in the 18-49 demo.

AMC Networks shares closed down 5.1%. The reason, Guggenheim Partners’ Michael Morris says, is that “the primary bear thesis” for AMC is that it relies too much on Walking Dead.

But he and others say the downturn is overkill.

“Really?! This isn’t good enough?” CLSA’s Vasily Karasoyov asks incredulously today in response to the stock drop. He believes the decline “will prove to be temporary” and has “absolutely no impact on our [earnings] estimates.”

Morris says AMC has outperformed many other content companies “in part due to higher ratings, as new original programs Better Call Saul and Fear The Walking Dead delivered solid ratings.” He also expects upcoming shows Into The Badlands, Preacher and Broke “to further draw attention to AMC’s robust programming slate” as the number of its original scripted episodes rises from 56 last year to 80 in 2015 and 109 next year.

Stifel Research’s Benjamin Mogil also notes that, even with the drop in viewers, Walking Dead “was the top-rated program on Sunday night ahead of Sunday Night Football, which saw a 33% decline in viewers” vs the previous week. All told, the Walking Dead ratings were “strong,” though he wants to see the three-day and seven-day audience numbers “to get a better sense of total viewership.”