Business Analysts Talk Disney Park Closure, Disney+
While many business analysts plan to keep their Disney stock through this current health and economic scare, they are beginning to think about how the current crisis will affect The Walt Disney Company.
And they should!
Disney halts production for some live-action films
- Disney is halting the production of some of its live-action films as concerns over the growing coronavirus pandemic worsen.
- No confirmed COVID-19 cases confirmed on productions, but Disney decided to halt production in “best interests of our cast and crew.”
- It is unclear how many employees will be impacted by this decision.
Scary Times For The Walt Disney Company?
Since then, DisneyBlog.com and other outlets have posted about a number of scary items regarding Disney.
Those stories include news on park closures, workers walking off the job, College Program workers being sent home, and fans criticizing the company for keeping resorts at Walt Disney World and Disney Springs open during the Covid-19.
However, financial analysts are attempting to keep things in perspective.
Disney’s empire won’t completely come undone with its high-tech turnstiles locked down. It realizes that folks will be spending a lot more time at home, and that’s where it’s unleashing its efforts. Star Wars: The Rise of Skywalker became available for digital purchase over the weekend, three days ahead of its originally slated release for online purchases. Frozen 2 — another of Disney’s blockbuster theatrical releases of 2019 — became available on Disney+ this morning, three months before that window was expected to crack open.
And in that vein, today Aparna Narayanan of Investor’s Business Daily wrote, “Walt Disney’s new streaming service is about to have its biggest expansion since launching in November, just as people around the world spend much more time at home. Disney stock rallied… Disney+ expands to the U.K., Germany, France, Italy, and Spain on March 24. India, the world’s second-most populous country, follows on March 29.”
But even that expansion of product on the streaming side won’t completely stem the tide for The Walt Disney Company as a whole. Disney+ is an important and growing portion of the business, but it pales in comparison to traditional box office and theme park revenue.
However, some analysts say hang on to (and possibly buy) Disney Shares; not only because of Disney+, but because they think the company will bounce back.
Disney is going to suffer in the short term. The combined revenue from the parks, experiences, and products and studios segments generated about half of its total revenue in fiscal 2019 (which ended in September). Operating profit from the parks segment alone made up 45% of Disney’s total last year.
However, even if Disney were to shut down all of its parks and postpones movie releases, missing out on billions in revenue and profit in the process, Disney’s long-term intrinsic value wouldn’t be permanently impaired. Disney is one of my largest holdings, and last week I bought more shares.
I am seriously thinking about buying some shares. How about you?