MoffettNathanson Downgrades Walt Disney (DIS) to Neutral; 'Unrivaled Earnings Risk' on COVID

(Updated - May 4, 2020 6:04 AM EDT)

(updating PT/comment)

MoffettNathanson analyst Michael Nathanson downgraded Walt Disney (NYSE: DIS) from Buy to Neutral, citing the risk of a longer coronavirus impact, with earnings revisions massively skewed to the downside. The firm set a $112 price target.

The analyst comments "While Disney has the advantaged assets to win in this new world, we fear that the uncertainty of the present situation creates significant and unrivaled earnings risk for the foreseeable future. The economic impact of social distancing is obviously most severe for the two divisions (Theme Parks and Studio Entertainment) that have driven free cash flow in the recent term. In addition, the acceleration in cord-cutting, coupled with ESPN’s high cost base, could further negatively impact Media Networks. On the brighter side, Hulu and Disney+ should gaining strength from this crisis, but do not contribute free cash flow to offset the erosion elsewhere."

For an analyst ratings summary and ratings history on Walt Disney click here. For more ratings news on Walt Disney click here.

Shares of Walt Disney closed at $104.23 yesterday.

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