Walt Disney Company (The) (NYSE: DIS) – Disney shares plummet, Cowen says parks won’t fully recover until 2025

The recent surge in COVID-19 cases has postponed reopening goals for many U.S. companies, such as Walt Disney Co (NYSE: DIS). On Thursday, a Disney analyst ran out of patience.

Disney analyst: Cowen creator Doug Creutz downgraded Disney from Outperform to Market Perform and lowered its target price from $ 101 to $ 97.

Disney’s thesis: Creutz said the Disney Parks and Movies segments will likely close for longer than anticipated based on the latest coronavirus trends. Disney has a large presence in the park in Florida, and its movie business is in California, two of the states hardest hit by the recent second wave of cases.

Creutz previously forecasted a reduction in social distancing restrictions by the end of 2020, but now he expects social distancing requirements to extend until at least mid-2021.

Even after the restrictions are lifted, Creutz said Disney’s Parks’ business will likely recover slowly. He projects that Disney’s national park business will not return to 2019 level profitability in fiscal year 2025.

At the same time, Cowen projects that Disney won’t release any movies in theaters until mid-2021 and will have only a modest release list in fiscal 2021.

Cowen lowered his EPS estimates for fiscal year 2020 and 2021 from $ 2.17 and $ 3.97 to $ 1.82 and $ 1.86, respectively.

Overall, we are lowering the expected FY20-FY23 FCF by $ 6.9B (a 27% haircut), and we are far from certain that this estimated cut represents the latest downward revision of our model, “he wrote. Creutz in the note.

The taking of Benzinga: The silver lining for Disney investors is that the company’s diversified business will help it weather the storm. Social distancing has helped fuel the robust growth of Disney + subscribers, which the company has an opportunity to further monetize in the coming years.

Related links:

Why Goldman Sachs is bullish on Disney and CBS, but bearish on Fox and AMC

From ‘Flintstones’ to ‘Rainbow Rangers’: CEO of Genius Brands in The Economics of A Cartoon