Analysts are warning Disney World theme parks could close longer than the currently scheduled two weeks with the shutdowns running into mid-April, costing the company $1.4 billion in revenue over the next two quarters, according to a new research note.
Research firm MoffettNathanson published an analyst note Tuesday that gives a grim overview of how the coronavirus pandemic will hurt the Walt Disney Company. Disney did not respond to a request for comment Wednesday.
On March 12, Disney announced it was closing Disney World theme parks effective March 16 with plans to re-open April 1. Disney hotels are closing as of 5 p.m. Friday through the end of the month. Universal and SeaWorld are following similar plans with their theme parks with expectations to open April 1.
Now, U.S. Centers for Disease Control and Prevention warns against gatherings of 50 or more people for the next eight weeks, according to new guidelines this week.
“We expect the closure to extend for another two weeks into April as the country scrambles to get this virus contained,” the analyst note said of Disney.
Meanwhile, Disney stock, which traded last year at more than $150 per share at one point, has fallen steeply. It’s currently trading at about $85 per share.
“Putting it all together, despite the fall in Disney’s stock price to date, we think the combination of COVID-19 impacts and an ensuing recession will cause unprecedented pain here,” the note said. “Making matters worse, Disney has taken on a more than average amount of debt to acquire Fox and has entered a period of lower cash flow generation due to their pivot into” streaming services.
The analyst note used Disneyfied words to put the past few days into context.
“The floor dropped (a la that feeling in Disney’s The Haunted Mansion ride) when, in a matter of days, key sports led by the NBA were postponed and Disney’s U.S. parks were closed.”
grusson@orlandosentinel.com
