Bernstein Slashes Walt Disney (DIS) PT to $119 on Expectation the Parks Will Close

(Updated - March 10, 2020 7:09 AM EDT)

Bernstein analyst Todd Juenger lowered the price target on Walt Disney (NYSE: DIS) 16% to $119.00 (from $141.00) on the belief that there is still more bad news ahead, including a 100% belief that the domestic parks will need to shut down. This assumption is included in his base case but is not based on any hint from the company that this will occur.

Under this new valuation framework, the analyst offers two potential scenarios:

• Base Case (50% probability, target price $125) COVID-19 impacts operations, but does not trigger a lasting macro or consumer impact
• Bear Case (50% probability, target price $114), COVID-19 triggers a recession.

The average works to a 12-month target price of $119 and while he admits that he cannot predict the direction of the virus outbreak, he offered the following framework: "If one believes COVID-19 will never get that bad, DIS stock (and most stocks) are significantly underpriced. If one believes COVID-19 persists a long time, or regenerates, or mutates; or where consumers' willingness to go to movie theaters and theme parks is permanently altered, there would be much more downside."

There was no change to the firm's Market Perform rating.

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