Disney stock has been shooting up the last few days as anticipation and then news of it’s reopening boosted it back up into the $120 range. But some analysts aren’t convinced this is a good thing. There’s concern it went up to far and too fast.

Imperial Research analyst David Miller has downgraded his rating for the Walt Disney Company from “in-line” to “underperform.”

Miller said “The stock has risen too far too fast and the performance is due simply to excitement around the prospects of the domestic theme parks re-opening.”

According to The Hollywood Reporter David Miller also cut his price target on the stock from $107 down to $105 as well as his 2020-2021 fiscal year estimates “due to a more conservative outlook for theme park volumes than previously assumed, as well as lower film ultimates.”

It seems his estimates are not only based on the over-reaction to theme park announcements but also due to the film industry. Movie theaters are reopening, but it’s yet unclear if movie-goers will return when they do.

“With movie theaters around the country likely to re-open in the next three to five weeks with limited occupancy, and with our concerns about attendance as it applies to families with small children … we are decreasing our fiscal 2020 and 2021 theatrical ultimate assumptions for select Disney-branded titles which are naturally designed to appeal to all age groups, but may not see attendance participation from families with children aged 4-10.”

I do get where he’s coming from with his assessment. This is someone who said Disney would “outperform” a year ago and it did, hitting over $150 per share in late 2019. I think it’s a wait and see type situation at this point, but it is coming back. It’s just not clear if it will stay up.

What do you think? Comment and let us know!

Source: The Hollywood Reporter