Wells Fargo analyst Steven Cahall has downgraded Walt Disney’s stock in a Tuesday report that forecasts the studio’s theme park division will take two years to return to normal attendance in the coronavirus pandemic era.
“We don’t think Parks can get back to anything close to full capacity until testing and/or vaccines are far more ubiquitous,” Cahall told investors. He downgraded the Disney stock to equal weight from overweight, with a price target of $107.00.
Shares in the studio closed Tuesday at $101.24, up $1.88 or nearly 2 percent on the day. The Disneyland Resort and the Walt Disney World Resort are closed indefinitely amid the COVID-19 crisis, and Walt Disney Co. executive chairman Bob Iger on Tuesday said talks are underway about best practices for when the North American theme parks can reopen.
Added Cahall: “We’ve thought the value creation from Disney+ (and later on Hulu) would be enough to more than offset a declining environment for media networks. We still believe in that, but we didn’t foresee this unique and severe downturn for Parks.”
The parks closed the weekend of March 14.
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