The stock market was a mixed bag Tuesday morning, with the Dow Jones Industrial Average (DJINDICES:^DJI) managing a small 0.15% gain by 11:05 a.m. EDT. The slow reopening of the U.S. economy is underway in many areas, but questions remain about how quickly the economy will recover and how reluctant Americans will be to return to their normal activities.
Disney (NYSE:DIS) may still be months away from opening its U.S. parks, but the company has started taking hotel reservations for July and will begin reopening a shopping center at Disney World later this month. The reopening of retail stores across the country will help sales of Apple's (NASDAQ:AAPL) iPhones, and one analyst expects pent-up demand for upgrades to drive sales of the tech giant's next-generation devices.
Disney World could reopen in July
Disney was forced to close its U.S. parks in March due to the pandemic. In April the company furloughed as many as 100,000 employees to preserve cash. With the parks, experiences, and products segment bringing in $26 billion of revenue and $6.8 billion of operating income last year, the shutdowns are going to hit Disney's top and bottom lines hard.
While the pandemic is far from contained in many parts of the United States, Disney is starting to plan for the reopening of its parks. The company hasn't set a date for when it will welcome guests back into its parks, but it is taking hotel reservations through the Disney World website for July. Last week, Disney announced that the phased reopening of Disney Springs, a shopping, dining, and entertainment center located at Disney World, would begin on May 20.
The reopening of Disney's parks will likely be a slow process. At Shanghai Disneyland, which reopened earlier this month, only a limited number of guests are allowed to visit each day. Those guests must also clear temperature checks, wear masks, and practice social distancing. Currently, Disney Shanghai is operating well below 30% capacity, the upper limit set by the Chinese government. Disney plans on increasing capacity by 5,000 guests per week until it hits that limit.
Disney stock was up slightly Tuesday morning. While the reopening of its parks is the first step on the company's road to recovery, it may take a long time for attendance to rebound to prepandemic levels.
Apple stock gets higher price target
While demand for Apple's iPhones reportedly tanked last month in the United States, one analyst is looking ahead to later this year. Wedbush analyst Daniel Ives boosted his price target on Apple stock from $335 to $350 on Tuesday, saying that the worst for Apple is likely already over.
Temporary factory shutdowns in China earlier this year roiled Apple's China-heavy supply chain. While the company was able to launch its budget-friendly iPhone SE last month, mass production of its upcoming 5G-enabled iPhones has reportedly been pushed back a month.
Demand is also a problem. U.S. iPhone sales reportedly crashed 77% in April, the result of widespread store closures across the country. A smartphone upgrade is easy for most people to delay, especially considering the premium pricing on most of Apple's iPhone lineup.
Ives sees Apple's new iPhones coming later in the year than normal and puts 10% to 15% odds on the phones launching in October. However, he expects strong sales driven by pent-up demand. iPhone users who delayed upgrading during the worst of the pandemic will be clamoring for the new devices, in Ives' estimation.
Apple stock was up about 1% Tuesday morning, inching closer to surpassing its prepandemic high.