Categories Leisure & Entertainment, Trending Stocks

Walt Disney (DIS) stock in cautious stance on pandemic spread

Executive Chairman Bob Iger will forgo his salary and new CEO Bob Chapek will take a 50% pay-cut

The Walt Disney Company (NYSE: DIS) is among the worst-hit by the covid-19 crisis as a majority of its theme parks, resorts, and motion picture business was impacted by the global pandemic. On March 23, the stock fell to a 6-year low of $79.07.

During the first quarter, Disney temporarily closed its parks in Shanghai and Hong Kong and is currently monitoring the public health crisis closely. Last week, the company closed two major parks – Disneyland Resort in Anaheim, California, and Walt Disney World Resort in Orlando, Florida.

Image Courtesy: Tyler Nix/Unsplash

In addition, Disney suspended its cruises and theatrical shows and postponed theatrical distribution of films both domestically and internationally. It also experienced supply chain disruptions. Also, the company faces issues with the creation and availability of content, which led to the cancellation of certain sports events and film production.

The travel sector is the most impacted by the outbreak. The Amusement Parks industry is expected to experience a decline in revenue in 2020, according to IBISWorld’s analysts. Over the five years to 2019, the industry has experienced strong growth backed by an increase in international and domestic visitor numbers and rising consumer spending.

As of September 28, 2019, the company employed about 223,000 people worldwide. To tackle this crisis, the executive officers of the company agreed for a temporary reduction in the base salaries effective with the payroll period beginning April 5. Executive Chairman Bob Iger will forgo his salary and new CEO Bob Chapek will take a 50% pay-cut while other executives will forgo 30% of their base salary.

Experts believe that the shutdown could last through the end of April but it doesn’t mean that operations would return to normal after that, considering the uncertainty surrounding the epidemic. Despite the near-term weakness, the company is likely to show growth in the long-term backed by its development in the on-demand (from home) entertainment business, which includes Disney+ and Hulu.

Disney’s stock opened lower but changed course to the green territory in the mid-afternoon on Monday. The stock rebounded as the streaming service continues to expand globally after the launch of Disney+ in seven European markets. The shares, which have fallen over 33% in the past three months, are overvalued at the current levels.

Most Popular

Mattel (MAT): A look at the toymaker’s expectations for the year

Shares of Mattel, Inc. (NASDAQ: MAT) were up slightly on Thursday. The stock has gained 20% year-to-date and 19% over the past three months. There is a level of optimism

Earnings Preview: Paychex likely to report higher Q1 revenue and profit

Paychex Inc. (NASDAQ: PAYX), a leading provider of human capital management solutions, is all set to publish operating results for the first three months of fiscal 2024. The company has

DRI Earnings: Key quarterly highlights from Darden Restaurants’ Q1 2024 financial results

Darden Restaurants, Inc. (NYSE: DRI) reported first quarter 2024 earnings results today. Total sales increased 11.6% to $2.73 billion compared to the same period last year. Blended same-restaurant sales were

Add Comment
Viewing Highlight