迪士尼股票承压。为什么华尔街在唱《无忧无虑》？
Disney's stock has dropped 12% this year amid waning consumer confidence and increased competition, particularly from Universal Studios. Despite a challenging economic environment and a decline in operating income for its experiences segment, analysts from BofA and J.P. Morgan remain optimistic about Disney's recovery. They predict improvements in the experiences sector, driven by new attractions and cruise ships. BofA rates Disney a Buy with a $140 target, while J.P. Morgan rates it Overweight with a $130 target. Major updates to Disney parks are also expected to boost visitation.
By Angela Palumbo
Disney's Lion King taught viewers that hakuna matata means no worries, but investors are worried about the stock as consumer confidence wanes and competition heats up.
Shares of Walt Disney have dropped 12% this year to less than $100 while the S&P 500 has declined 4.6%. As the company puts more money into major updates of its theme parks and introduces a new fleet of cruise ships, consumers are feeling pinched.
The latest retail sales report came in below expectations and consumer sentiment is sliding. The economic environment is uncertain with new tariff policies taking effect soon and inflation remaining sticky. Several airline companies cut guidance for the current quarter earlier this month, citing weaker consumer confidence.
Competition is also picking up. Universal Studios in Florida underwent a major update; its new Epic Universe theme park is scheduled to open in May. Customers may choose to spend their vacation there instead of at Walt Disney World.
Analysts at BofA Securities and J.P. Morgan are still optimistic about the near-term performance of Disney's experiences sector, though.
Disney's experiences segment includes theme parks and cruises and is the company's largest contributor to operating income. In February, the company reported a negative impact on experiences operating income for the first quarter. Domestic Parks & Experiences operating income declined by 5% following hurricanes and cruise pre-opening expenses.
BofA analyst Jessica Reif Ehrlich is confident the segment can bounce back. She wrote in a research note on Friday that the second quarter will reflect a "sequential improvement in the Experiences segment operating income which will subsequently accelerate in 3Q and 4Q," aided by the fact they will be compared to last year, which was impacted by diverted travel to the Paris Olympics and sticky inflation.
Ehrlich, who rates Disney a Buy with a $140 price target, is also confident in the performance of the company's newest cruise ship, the Disney Treasure, which set sail in December. Disney plans on adding more cruise ships in coming years.
J.P. Morgan's David Karnovsky rates Disney as Overweight with a $130 price target. He's also optimistic about the experiences sector and wrote in a note on March 11 that "we're bullish on the long-term earnings power of this segment as capex is deployed into new capacity and cruises, and pricing is further refined."
Disney announced some major updates to its theme parks in August. The company said at its D23 event that the Magic Kingdom park in Disney World will get its "largest land expansion ever," including the addition of attractions based on Disney villains and the movie Cars. The Hollywood Studios park is also getting new Monsters, Inc. attractions.
"Planned Disney parks expansions lean heavily on popular IP and should provide incentive for new and repeat visitation," Karnovsky wrote.
In the meantime, investors will have to decide whether or not they want to stay on this ride.
Write to Angela Palumbo at angela.palumbo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
