Market Overview

Hurricane Irma Is Already Impacting Expectations For Disney

Hurricane Irma Is Already Impacting Expectations For Disney

Even before it hits Florida, Hurricane Irma is already having an impact on Walt Disney Co (NYSE: DIS)’s earnings forecast.

CEO Bob Iger said Thursday that earnings for 2017 will come “roughly in line” with the previous year’s, which ended with core earnings of $5.71 per share, down from the consensus of $5.98. Disney wound up closing at $97.60, down 4.37 percent, Thursday.

“After digesting the comments, and running our own analysis, we believe the lowered outlook is due mostly to the effects of Hurricane Irma, which ironically has not yet hit Florida, but likely will on Saturday,” wrote David W. Miller, managing director at Loop Capital Markets.

He lowered Disney’s price target from $106.00 to $104.00 and rated it a Hold.

Irma’s Impact On Cash Cow Disney World

Irma is one of four factors for the lowered forecast, he wrote; the others being poor movie sales, the cost of National Basketball Association telecast rights, and operating costs in Disney’s 75-percent take in BAMTech, the video provider that is essential to Disney’s plans to start its own streaming television channel in 2019.

He said the storm has two potential impacts: cancelling existing reservations at Walt Disney World in Orlando and the closure of the whole park complex.

“In tandem, we are assuming for sake of this exercise that the effects of Hurricane Irma will shut DIS' Orlando operations down for at least four days,” he wrote. “We are also assuming that one-half of DIS' cruise operations will become inoperable over the next five days, including yesterday.”

Related Link: Disney Vs. Netflix: Content Is King


Image Credit: By NOAA - [1] (Accessed at 03:46UTC 7 September 2017), Public Domain, via Wikimedia Commons

Latest Ratings for DIS

May 2020Imperial CapitalDowngradesIn-LineUnderperform
May 2020Loop CapitalDowngradesBuyHold
May 2020JP MorganMaintainsOverweight

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