Please ensure Javascript is enabled for purposes of website accessibility

Here Are All the Ways Coronavirus Is Tanking Disney Stock

By Jennifer Saibil - Mar 19, 2020 at 12:54PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

With all of its segments taking a hit, the company's near-term prospects are in trouble.

Disney (DIS -1.13%) stock fell below $100 for the first time since October 2017 this week as the company has had to delay movie openings, close its theme parks, and curtail other entertainment programs.

Falling revenue everywhere

Under normal circumstances, Disney has a wide range of revenue stream, including film production, theme parks and attractions, hotels and cruises, licenses for consumer products, television networks, and more. While this allows the company significant opportunities for making money, the coronavirus pandemic is affecting all of them.

Disney World view.

Image source: Disney.

These are some of the ways COVID-19 is impacting the entertainment giant:

  • Delaying the release of "Mulan," which was expected to gross $80 to $100 million in it's opening weekend.
  • Delaying all of its third quarter film releases. Last year Disney grossed over $1.5 billion in third quarter film releases.
  • Closing all theme parks until at least April.
  • Many retail stores shuttered, slashing sales of licensed merchandise.
  • Cancelled sporting events that would be shown on its networks.

Disney massed $11 billion in revenue from its films in 2019, with the much-hyped releases of the last Star Wars movie and Frozen 2. 2020 wasn't expected to match that, and this will throw it off even more.

Creating uncertainty

Because the pandemic is affecting so many segments of its business, it's complicating Disney's ability to make predictions about its performance in the coming quarters. The company outlined its challenges in a Securities and Exchanges Commission filing on Thursday, saying, "We have closed our theme parks; suspended our cruises and theatrical shows; delayed theatrical distribution of films both domestically and internationally; and experienced supply chain disruption and ad sales impacts."

Some parts of Disney's model are intact during this time, such as direct streaming through Disney Plus and online merchandise sales.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$96.08 (-1.13%) $-1.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
322%
 
S&P 500 Returns
113%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.