Financial analysts remain concerned about the long-term damage COVID-19 will have on the Walt Disney Company. The road to recovery will be a long one, especially for a company that was at an all-time high a few months ago.
Market Watch is reporting that concerns about a long recovery period for Walt Disney Co.’s parks segment have prompted at least the third downgrade of the media giant’s stock this month.
The latest analyst to report on Disney is John Hodulik of UBS. In a note titled, “Eye of the Storm,” Hodulik addressed Disney’s greatest risk amid the coronavirus pandemic, and when the parks might reopen.
The USB analyst issued a warning that all aspects of the Walt Disney Company face risk from the COVID-19 outbreak, but Disney’s greatest risk is their Parks. According to Market Watch, the base of Hodulik’s case now assumes that the company won’t be able to reopen its parks until Jan. 1, 2021, and he expects the company’s attractions business to remain pressured even beyond then.
In his “Eye of the Storm” note, Hodulik wrote, ”The 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.” He then cut his price target on Disney’s stock to $114 from $162.
Disney’s Executive Chairman, Bob Iger, has made similar statements regarding a vaccine and testing options. Recently named to California’s COVID-19 task force, Iger’s words pointed to the direction of testing everyone and/or a vaccine being in place before all bans are lifted and California allows large gatherings.
Disney Parks has not issued a timeline for when they might reopen. We know from the news over the past few days that Disneyland and Disney World are taking part in task forces to reopen the economy of their states, and are advising on how to do so. As of right now, Disney Parks is allowing guests to make reservations for June 1st and on. They have not canceled any special events such as; Mickey’s Not So Scary Halloween, EPCOT’s International Food and Wine Festival, or Mickey’s Very Merry Christmas Party.
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