This morning, Walt Disney Shares fell 3.15% after research firm MoffettNathanson downgraded the company's stock from Buy to Neutral. The downgrade comes just one day before Disney (DIS) reports their quarterly results. Currently, shares are trading at $102.79 and the analyst from the firm, Michael Nathanson, adjusted his target price for shares from $120 to $112.
Theme parks, cruise lines, and hotels are taking the brute of the coronavirus impact. Unfortunately for Disney, their business includes all three categories.
Carnival cruise line (CCL) has announced that they may begin sailing again in August, but Disney hasn't announced a date for their own fleet. Also, all Disney theme parks have been closed since March 16, and hotels are also closed. Similar to their cruise line, it's unclear when the company plans to re-open their theme parks.
It's unclear how much the company is losing in revenue and capital, but in February, former CEO Bib Iger said that Hong Kong Disneyland and Shanghai Disney Resort lost $145 million in eight weeks.
Disney is set to report their quarterly earnings after the stock market closes tomorrow. MoffettNathanson predicted that the Mickey Mouse company would lose about $3.4 billion if they remained closed through mid-April, which they're still closed as of the 4 of May.
It's unclear when Disney theme parks will re-open. When they do open, many analysts have predicted that it'll be at least until 2021 that the park will reach peak production
Disney is also believed to be vulnerable to a second wave of coronavirus once parks are opened because of international crowds.
Because of uncertainty, many Disney investors are skeptical about buying the company's stock. Be sure to watch out for their quarterly report tomorrow after the bell, financial movers.