BREAKING NEWS: Disney Stocks Downgraded Again Amid Fears Parks Might Not Open Until January
The Walt Disney Company’s stocks were just downgraded for the third time this month with one analyst saying that unfortunately, Disney is in the “eye of the storm” when it comes to the impact COVID-19 is having on business.
UBS analyst John Hodulik became the latest Wall Street figure to move the sidelines of Disney (DIS) down -2.43% in shares. This lowered his overall rating to neutral. MarketWatch also tells us that shares are off 3.7% this morning in trading.
The reasoning for the downgrade comes with a warning for Hodulik that all aspects of Disney’s business are “at risk” as a result of the COVID-19 shutdown. The largest being the company’s theme parks segment. It is Hodulik’s belief that we may not see the parks re-open until January 1, 2021.
”[T]he economic recession plus the need for social distancing, new health precautions, the lack of travel and crowd aversion are likely to make this business less profitable until there is a widely available vaccine,” Hodulik wrote. Alongside this statement, Hodulik cut his price target on Disney’s stock to $114 from $162.
Hodulik gave his long-term projection stating that Disney may be able to “regain their recent operating cadence in ~18 months, coinciding with the earliest expectations for a widely available vaccine for COVID-19.”
But it isn’t just the theme parks closures signifying an unstable time for the company. Hodulik also has concerns about the company’s media business. The lack of live sports content is a huge factor leading to weak advertising trends. With no idea as of yet when sports leagues will resume Hodulik argues that the impact could be even greater should college football go on hiatus in the Fall.
If there are any positives to be found, these lie within Disney’s film business. Hodulik argues that the impact for Disney “could have been worse.” Disney had a weaker film slate this year after a blockbuster 2019. He also expects a gradual recovery at the box office and an opportunity try out new release strategies.
Another positive is the Disney+ streaming service serving as a “bright spot” during these dark times. With 70 million subscribers expected by the end of the fiscal year, it’s helping to bolster the rest of Disney’s troubled industries.
Readers are encouraged to keep following along with MickeyBlog for the latest Disney news and updates.
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