Tags: disney | stock | park | reopen | jpmorgan

JP Morgan: Buy Disney Stock Because Open Theme Parks Are a 'Critical Sign of Recovery'

JP Morgan: Buy Disney Stock Because Open Theme Parks Are a 'Critical Sign of Recovery'
(Radu-Razvan-Gheorghe/Dreamstime)

By    |   Monday, 13 July 2020 09:19 AM EDT

J.P. Morgan said the reopening of Disney World’s Magic Kingdom Park and Animal Kingdom Park is good news for Walt Disney Co. stock.

Analyst Alexia Quadrani reiterated an overweight rating and $135 price target on Disney shares Friday, writing that the “reopening of the parks globally is a critical sign of recovery as this removes the largest overhang at the company due to COVID-19,” Barron's reported.

Meanwhile, Mickey Mouse waved from a distance and visitors wore colorful face masks with mouse ears on Saturday as Florida's Walt Disney World opened to the public for the first time in four months amid a surge of coronavirus cases in the state.

Walt Disney Co welcomed a limited number of guests to its two most popular parks at the sprawling Orlando complex, the world's most-visited theme park resort, with a host of safety measures designed to reassure visitors and reduce the chances of catching the sometimes deadly virus, Reuters reported.

Executives felt confident they had a responsible plan for reopening in phases during the pandemic, said Josh D'Amaro, chairman of Disney's parks, experiences and products division.

"This is the new world that we're operating in, and I don't see that changing anytime soon," D'Amaro said in an interview on Saturday after he greeted guests and workers at the park.

Disney's reopening of parks in Asia helped provide assurance about moving ahead in Florida, he added. Disneyland Shanghai opened in May, followed by the Disneyland parks in Hongkong and Tokyo in June and July, respectively.

"I feel really good about our environment," D'Amaro said. "We're taking this seriously."

Disney did not say how many people entered Walt Disney World on Saturday, but D'Amaro said he saw "really good demand" for reservations in the short term and into 2021.

The openings increase Quadrani’s confidence in the stock, but that isn’t the only thing keeping her bullish. She notes that Disney+ saw more than three-quarters of a million new mobile downloads of its app world-wide over the Independence Day weekend, which included the service’s July 3 release of musical Hamilton.

Quadrani has “increasing conviction that the health of the company is returning throughout several of its segments, with a move toward profitability in fiscal 2023 at Disney+, the reopening of the parks, and the return of live sports.”

Disney stock (DIS) is down more than 19% year to date, as the pandemic has hit the company hard. It has had to delay movie releases, and a lack of live sports is a headwind for its ESPN business, Barron’s said.

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StreetTalk
J.P. Morgan said the reopening of Disney World’s Magic Kingdom Park and Animal Kingdom Park is good news for Walt Disney stock.
disney, stock, park, reopen, jpmorgan
423
2020-19-13
Monday, 13 July 2020 09:19 AM
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