What To Make Of Disney World Opening Amid A Spike In COVID-19 Cases

Walt Disney Co DIS is proceeding with its plans to reopen its Disney World parks in Florida on Saturday despite surging coronavirus cases. Should Disney investors be worried about the company's decision?

Ex-Imagineer: Opening Can Be Safe

Disney should open its Orlando park to the public and can do so safely, Bill Coan, an ex-Disney Imagineer and design manager at Disneyland Paris, said on CNBC. In fact, Disney can offer an experience that's as safe as anything else that's open to the public in everyone's day-to-day life.

Coan said the experience itself will be different as all parks and entertainment venues are impacted in many different ways from the pandemic. The changes will be both "overt and covert" and designed to make the guests feel more comfortable. But the changes will be more visible to regulars and new guests are unlikely to identify what changes have been made.

Disney needs to take advantage "as best as they can" the summer season to gain "practical operating experience" in capacity management before the Fall and Winter months.

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CFRA: 'Huge Pent Up Demand'

Disney's total 2020 revenue is likely to fall just 2.8% from 2019 in part due to a "huge pent up demand" for its Parks, CFRA senior media and entertainment analyst Tuna Amobi said on CNBC. In fact, hundreds of people were lining up for Downtown Disney's reopening on July 9.

Meanwhile, Disney already re-opened other Parks in Shanghai, Hong Kong and Tokyo so it has some experience "under its belt," Amobi said.

JPMorgan: 50% Capacity By 2021

Disney investors will need to start making assumptions related to how many people will return to Parks, JPMorgan media analyst Alexia Quadrani also said CNBC. Current assumptions call for Orlando to open "well below" its allowed capacity at 20% to 25% of normal operating levels.

After the reopening phase, Disney will "slowly build up" back to 50% of normalized capacity by early 2021, the analyst said.

Disney's stock traded higher by 2% to $119.18 per share at the time of publication Friday afternoon.

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