Disney Stock Downgraded as Analyst Warns of 'Unrivaled Earnings Risk' Due to Pandemic

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MoffettNathanson analyst Michael Nathanson downgraded his rating on Walt Disney's stock to 'neutral' due to the novel coronavirus pandemic, writing: 'The economic impact on the company will be longer than most anticipate.' Details:

"We believe the economic impact on the company will be longer than most anticipate, especially given the risks of a second wave of infections after reopening," writes MoffettNathanson's Michael Nathanson.

"There are a number of risks that could lead this unprecedented event to have a longer impact, with earnings revisions massively skewed to the downside," he wrote in a report. "Our Disney downgrade is also an admission that we believe the economic impact on the company will be longer than most anticipate, especially given the risks of a second wave of infections after reopening.

The analyst further reduced his earnings forecasts for Disney, explaining: "We do expect Disney to be given a pass from investors on fiscal year 2020 earnings and to some degree fiscal year 2021 as the impact of the pandemic likely lingers. However, we are also reducing our fiscal year 2022 forecasts to factor in the additional risk and uncertainty about what a new normal will look like across most of Disney’s businesses.

 

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