Since the beginning of this year, Disney (NYSE:DIS) stock has lost over 35% as investors fled following the closure of its theme parks and putting on hold movie premieres as a result of the coronavirus concerns.
The coronavirus outbreak has affected most markets and shut many parts of the economy, and the spread seems not to stop. Nevertheless, these concerns have minimal bearing on the future of the company in the long-term, and thus the stock might have a rare opportunity.
Disney stock drops on coronavirus concerns
Over the years, Disney stock used to depend on the potential of its Media Network division. But the stock dropped significantly in 2015 as customers shifted from the Disney Channel and ESPN to streaming services such as Amazon.com Inc.’s (NASDAQ: AMZN) Prime Video and Netflix Inc. (NASDAQ: NFLX). However, last year’s launch of Disney+ changed the trend, and the stock surged higher.
In November 2019, Disney+ came online, and on the first day, it reported 10 million subscribers, and by the end of February, it had over 28 million subscribers. But the effects of the coronavirus outbreak have dampened investor confidence, and last week the stock dropped below $80 per share the lowest in six-year.
Closure of Them Parks to impact on this quarter’s earnings
The company’s Media Networks and Studio Entertainment divisions will see a decline in revenue because of canceled events and delayed movie launches. Equally, the Theme Park division will be hit as a result of closure because of coronavirus. Because of these effects, the company will report some revenue loss this quarter because of park closures, and analysts expect earnings of $1.13 per share down from $1.61 reported last year.
Whatever is being experienced currently will soon pass, and the significant drop in Disney stock seems like a huge opportunity for investors. Considering the drop in stock price is something experienced across the markets, Disney will overcome this once normalcy returns. The company has a huge content portfolio from the likes of Marvel, Pixar, Lucasfilm and 20th Century Fox studios.
