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Disney (DIS) stock price is falling. Wells Fargo analyst Steven Cahall stated that the studio’s theme parks division will need a couple of years to return to normal business.
The Walt Disney business has been seriously hit by the stay at home orders caused by the ongoing coronavirus. The Walt Disney Company (NYSE: DIS) stock fell 1.2% in after trading hours on Tuesday and is 1.1% down now, after Wells Fargo analyst Steven Cahall downgraded it, claiming that the Disney parks attendance could take up to two years to normalize.
“We don’t think parks can get back to anything close to full capacity until testing and/or vaccines are far more ubiquitous. We see the limiting factor as health-care technology as assets like Walt Disney World will either need to operate with social distancing in place-significantly limiting capacity- or a vaccine will need to be widely enough available that the population will again feel safe in such a gathering.”
At the time of writing, Wednesday, April 8, the DIS stock value was at $100.12. The stock fell sharply in the first 2020 quarter, to trade even below last year’s lows.
The American diversified multinational mass media and entertainment is headquartered in California, a state struggling with a rising number of infected people by the novel coronavirus.
As of 2019, the company’s revenue stood at $69.57 billion, while the net income stood at $11.86 billion. The number is expected to fall significantly this year, as more hard times are yet to hit, according to the virus statistics.
The number of infected people in the United States was 363,321 as of April 7, according to data from the CDC. In the state of California where the company has its headquarters has confirmed over 16,000 positive cases and recorded 374 deaths after testing around 157,800 samples.
As social distancing becomes the order of the day in most U.S. states, businesses that depended on mass people attendance to make profits will continue to count losses.
Disney World Parks and Coronavirus in Future
Former CEO and current chairman of Disney World Bob explained said that in order for the business to return as normal, people will have to feel safe.
“Some of that could come in the form of a vaccine, but in the absence of that it could come from basically, more scrutiny and more restriction.”
However, he remains very optimistic about the long-term prospects of the business.
“We know when it ends that we will have things for the public to enjoy and to escape to, maybe in ways they will appreciate more than they ever have”, concluded he.