Quarterly Earnings Out This Week- Disney To Reveal How It’s Holding Up During Pandemic
This is a big week for the Walt Disney Company as they are expected to reveal their quarterly earnings this week. As Marketplace.org points out, the company has certainly had is fair share of ups and downs during the COVID-19 pandemic. With theme parks closed, cruise lines shut down, resorts shuttered and cinematic productions delayed this quarterly earnings report has investors watching closely.
As Lloyd Greif CEO of an Investment Bank in Los Angeles said, “If there was ever a poster child for being vulnerable to COVID-19 in terms of your business model, Disney is it. ” Grief added that going forward “Disney has to be rethinking the model in this environment.”
One expected outcome is that Disney will start to capitalize more on the fact that people are staying at home. Disney+ will certainly be a focus point especially with the success of recent releases like Hamilton and Black Is King as well as a handful of Emmy nominations. In addition, Disney did purchase 21st Century Fox last year. This is the silver lining as Abraham Ravid, professor of finance at Yeshiva University, said Disney is diversified enough to hold on even if the pandemic lasts for a while. “If they could go back to normal, so to speak, by the end of the year, they should be OK,” Ravid added. “They’ll have losses, but they should be able to withstand it.” However, in order to do this Ravid said that the key to Disney’s future financial success is continuing to add subscribers to Disney+
However as Barrons.com suggests, what investors will really be looking for out of these quarterly reports is “the outlook for a recovery.” With some of the theme parks having reopened, sports leagues starting back up, investors will want to know what comes next for Disney.
In terms of stocks Disney is expected to report a loss of 61 cents per share during the last quarter which is down from a 60 profit in the first quarter during first quarter when the COVID-19 impact started to be felt. As Barron’s tells us, it also compares to $1.35 in adjusted earnings per share in the year-earlier period. Wall Street expects that Disney’s fiscal third-quarter revenues dropped 39% year over year, to $12.4 billion, and that adjusted earnings before interest, taxes, depreciation, and amortization, or Ebitda, fell to a $50 million loss from a $4.6 billion profit last year.
Disney stocks have dropped 19% this year and management suspended Disney’s dividend earlier this year. Wall Street analysts lean bullish on Disney stock: 50% have a Buy or equivalent rating, while 46% recommend a Hold. One analyst rates Disney at Sell. Their average target price is $123.52, about 6% above the stock’s recent level of $116.94.
Disney will officially report on earnings after the market closes tomorrow (Tuesday August 4th.) This is a story that we here at MickeyBlog will continue to follow closely. Readers are encouraged to keep checking in with us for further news and updates!
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