Walt Disney Company Stocks Fall Once Again Due to Concerns Parks May Not Reopen Until 2021

The Walt Disney Company has seen a whirlwind month within the market, getting out-performed by Netflix only to gain advantage shortly after with the White House’s announcement for a phased reopening of businesses to potentially begin in May. However, investors haven’t fully regained hope in the company, with UBS analyst John Hodulik claiming that Disney is currently in “the eye of the storm” in terms of recovery.

Disney stock has received its third downgrade so far in April, with shares down by 2.45% this morning.

According to Hodulik, while all aspects of Disney’s business faces risk from the COVID-19 outbreak, the parks are among the most impacted. He anticipates that the company won’t be able to reopen its parks until Jan. 1, 2021, with restrictions on parks operations and attendance spanning far beyond that.

Hodulik commented on the need for social distancing and other health protocol:

“[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.”

He believes the parks will resume full operation in about 18 months, coinciding with the earliest available vaccine for COVID-19.

There are also some concerns about the company’s media business, with ESPN scrambling to salvage sports leagues and box offices still trying to figure out new release strategies for movies while theaters remain shuttered worldwide. The parks represent 27% of the company’s revenue, while the film and television studios account for 18%, according to Credit Suisse. Disney is still facing an uphill battle as the company has accrued $13 billion in debt and credit agreements in order to mitigate the financial effects of closing down its parks and film studios.

Source: MarketWatch

For more information on booking your next trip with our official travel agent sponsor, the Vacationeer, visit wdwnt.travel.

0 0 vote
Article Rating
15 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Ken Goldenberg
Ken Goldenberg
7 months ago

While the numbers don’t lie, I always take what these analysts say with skepticism. I feel most of them are just trying to promote themselves and predictions to bolster their careers and be able to say “I was right’. Here in California while I’m not a fan of Gov. Newsome (although I think he has done an admirable job at this time), I’m going with what he is saying about pointing to around August of large venues being able to begin to open back up.

Latinxduchess
Latinxduchess
7 months ago

🔥🔥🔥🔥 this is fine 🙃 🔥🔥🔥🔥

Jason K
Jason K
7 months ago

Should I still take January with a grain of salt?

Ian Motter
Ian Motter
7 months ago

Sorry – but what does a Telecom Analyst know about theme park operations?

Ron Langston
Ron Langston
7 months ago

These analysts all have agendas, as in, is he or his company short or long disney stock? Also, he is essentially saying that they can’t open fully till we have a vaccine. That discounts any other ways to mitigate COVID-19 such as medicines, etc. It also essentially says “we will not find out anything new about COVID-19 for 18 months”. What if the true mortality rate ends up being adjusted down to .01%? What if it has been spreading through the U.S. for many months already and tens of millions have already had it and recovered? Give it 3-4 weeks… Read more »

AdeeK
AdeeK
7 months ago

Not opening until 2021 is absolutely absurd. If they’re stupid enough to keep it closed until then then Disney’s deserves to fail.

RebeccaMcK
RebeccaMcK
7 months ago

I’m still hoping I can go in November, but my flight is refundable and my DVC points can be “put back” if I have to cancel. I won’t go if not enough attractions will be open and if it’s still dangerous out there, but otherwise I’ll do what’s safe even if I have to stay home for the big 5-0. I can visit the parks virtually with YouTube if necessary. Still…I don’t like guesstimate articles from economists trying to predict what NO ONE really knows for certain.

Raxel7851
Raxel7851
7 months ago

Never underestimate the minds of Disney!!

Scott Sybert
Scott Sybert
7 months ago

The wheels are falling off this Corona fiasco and studies out of Stanford have YET AGAIN slashed death tolls and fatality rate. Each day that passes esposes more hospitals classifying ALL deaths as Corona to collect Federal emergency funds and more studies indicating this is nearly equivalent to seasonal flu… These politicians are all playing “who goes first” Georgia kicked it off weeks ago with beaches, then today announced reopening resturants, some entertainment and retail through next Monday. Florida followed with some beaches then South Carolina, Tennessee and Texas have also laid plans to begin reopening next week. Nothing will… Read more »

Vanessa
Vanessa
7 months ago
Reply to  Scott Sybert

You are astoundingly misinformed. But I suppose anyone who would write the word “rediculous” shouldn’t be given much credence. COVID-19 is FAR worse than the seasonal flu. Imbeciles who continue to spread that fallicy are the true problem in this country. The death rate is much higher. People throw around the number of deaths from seasonal flu, not taking into account those numbers are for a year, not for the four months we’ve been dealing with this pandemic. Approximately 56k die of the flu each YEAR. Already more than 40k have died of COVID. Hospitals have run out of supplies.… Read more »

Sean
Sean
7 months ago
Reply to  Scott Sybert

Spot on, thanks for great opinion, I agree.

Jack Renner
Jack Renner
7 months ago
Reply to  Scott Sybert

By your logic all viruses are the seasonal flu… perhaps you should join the protesters that are catching it from each other…

Ron Langston
Ron Langston
7 months ago
Reply to  Scott Sybert

Great reply and you are correct. The narrative around this virus is falling apart. Wasn’t it supposed to be our “Pearl Harbor” moment a few weeks ago? Stoke fear, take control, and let the sheep fall in line. I am glad to see these protesters standing up for their constitutional rights.

Mark Miller
Mark Miller
7 months ago
Reply to  Scott Sybert

Right on the mark, Scott! Citizens and governments are slowly waking up to the reality of this ‘fiasco’. Well said!

Frank W
Frank W
7 months ago

Disney will not accept the lack of revenues from the parks for that long.