Analysts Forecast a $10 Billion Loss for Disney in 2020

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Walt Disney Company Stock Dropping

It’s no secret that the Walt Disney Company is not doing very well. The COVID-19 pandemic shut down both the theme park and movie industries for a few months. This has caused a huge financial hit for the company, with their Disney+ streaming service being their one bright spot.

Now Deutsche Bank analysts feel that the company won’t likely bounce back until 2022 and that Disney may see almost $10 billion in losses from 2020 alone.  2021 will likely see some improvement but they are calling it another “lost year” according to the OC Register.

Here’s an excerpt from their article:

“Disney Parks, Experiences and Products division revenue is forecast to decline $9.8 billion in fiscal year 2020, according to the Deutsche Bank report. Disney theme park revenue isn’t expected to bounce back to pre-pandemic levels until 2023, according to the report.

“We assume substantial improvement in FY22, but with revenue still not fully back to the FY19 level,” according to the report. “We assume a return to full parks earnings power in FY23.”

The good news: Deutsche Bank forecasts that the Disney theme park division will rebound significantly by fiscal year 2025 with revenue $10 billion higher than pre-pandemic levels.”

So the good news is that they do expect the company to rebound and exceed the financials of 2019. The bad news is that it will likely take until 2025 for this to happen.

I really don’t think many people are going to be surprised by that prediction. The Walt Disney Company was not going to bounce back from this right away. The movie industry is just now beginning to start up again, and California is still facing many restrictions that have led to a lot of people leaving the state, including celebrities.

Theme parks have been reopening, except for California, but they have capacity guidelines and restrictions. Now Disney has had to cancel some of their big money makers like Mickey’s Not So Scary Halloween Party and Mickey’s Very Merry Christmas Party. Many are simply waiting to visit the parks when they feel safer to do so. The Disney Cruise Lines have been halted, like most of the cruise industry.

Deutsche Bank analysts don’t feel that the parks will rebound until a vaccine is widely available.

We think there’s upside to our forecast if an effective COVID vaccine becomes widely available during the next six months,” according to the analysts report. “We continue to believe that a widely available treatment and/or vaccine is required for a normalization to full earnings power at the parks.

It’s going to take people awhile to feel safe enough to travel or to have the money to do so. A lot of people have taken large financial hits as well.

According to CEO Bob Chapek during the last earnings call, the demand was less than they expected and many were cancelling bookings due to the spike in cases that were occuring in Florida before the July reopening dates. Since that time there have been some improvement on attendance, but there are still caps in place to limit the number of guests for social distancing.

Florida has been seeing a decline in the number of new cases, and have had the lowest number in three months. However, after the Labor Day holiday, many fear that number might spike again.

For now the analyst report is focusing on the positive three month low.

“We believe the recovery in theme park attendance is progressing, albeit gradually. We believe this trend will continue as new COVID cases in Florida decline.”

It’s going to be a slow but steady return for the Walt Disney Company. Hopefully they come out the other side of this aware that maybe they weren’t as invincible as they thought they were.

What do you think? Comment and let us know!

Source: OC Register


Pirates & Princesses (PNP) is an independent, opinionated fan-powered news blog that covers Disney and Universal Theme Parks, Themed Entertainment and related Pop Culture from a consumer's point of view. Opinions expressed by our contributors do not necessarily reflect the views of PNP, its editors, affiliates, sponsors or advertisers. PNP is an unofficial news source and has no connection to The Walt Disney Company, NBCUniversal or any other company that we may cover.