Disney shares revamped on Monday after California announced that Disneyland and California Adventure could reopen on April 1. Meanwhile, “Raya and The Last Dragon” opened in theaters, but expected less than expected.
X
The long-awaited reopening of parks comes after a year of closure. Disney’s (DIS) theme parks will be allowed to reopen with 15% capacity once Orange County reaches the red / substantial Level 2 risk status. The parks can expand to 25% once the province reaches level 3 and 35% in the least restrictive level 4.
The theme parks segment had a major setback for Disney earnings, while rising profits caused Disney shares to rise higher.
Other parks like Comcast (CMCSA) famous Universal Studios Hollywood and Six Flags Entertainment‘s (SES) Magic Mountain and SeaWorld Entertainment‘s (SEAS) SeaWorld San Diego may also reopen on April 1 when the country in which they are located reaches level 2.
Under the old rules, larger parks like Disneyland would have to wait until Orange County was at level 4, while smaller parks would be able to reopen at level 3. Government Gavin Newsom’s “Blueprint Refresh” no longer makes the distinction.
Meanwhile, Disney’s release of the animated film “Raya and the Last Dragon” hit the box office this weekend, grossing $ 8.6 million. It premiered at 2,045 theaters, including in New York, where theaters reopened to 25% of capacity. But it did not make such a big splash as expected. It was far below Warner Bros.’s. ” Tom & Jerry ‘$ 14.1 million opening.
In addition, ‘Raya’ did not have a wide international opening. It earned $ 26.2 million worldwide, including China. However, some movie chains refused to show the movie due to a dispute over the terms of its availability on Disney +. Nr. 3-exhibitor Cinemark, as well as Harkins and Cineplex of Canada, blocked the title in its theaters.
“Raya and the Last Dragon” was available to Disney + subscribers for an additional $ 30. Disney officials did not provide details on how many subscribers paid to see it on its streaming service. In contrast, ‘Tom and Jerry’ was available for free on HBO Max.
IBD Live: a new tool for daily stock market analysis
Disney Stock
Shares rose 6% to 201.25 on the stock market today, reaching the highest intraday high of 200.60 reached on 24 February. Disney shares are extended to a buy price of 183.50 from a flat base, according to the MarketSmith chart analysis. But an aggressive investor or swing trader may interpret the jump of a short-term trend on Monday as feasible, but with the market outlook, it is still risky.
Disney shares have an RS rating of 78 out of a possible 99. Its relative strength has been trending upwards since then Pfizer (PFE) and Modern (MRNA) announced in November that they have an effective Covid-19 vaccine. The stock has also improved since Disney announced a reorganization in December to reflect the growing focus on its streaming business.
Streaming competitors Netflix (NFLX) decreased by 1.9% and appeal (AAPL) lost 2.8%, while Six Flags jumped 6.8% and Sea World rose 6.4%.
Reopening of Spurs’ Optimism
The impending reopening of Disneyland as well as the recent reopening of theaters in some major markets are making Wall Street optimistic.
“We see this as another step in the right direction, as Disney is taking advantage of the reopening of its theme parks (with Disneyland Paris expected to reopen on April 2), and the return to theatrical movies with the recent reopening of theaters. NYC and San Francisco, ”said JPMorgan analyst Alexa Quadrani recently in investments.
It’s now that Disneyland wants to hold a ticket outdoor dining event in March, which is estimated to bring back about 1,000 employees. Although Quadrani does not expect the park to be profitable with a capacity of 15%, she said its reopening will help offset the cost, as Disney has seen in its other parks.
Disney’s Parks, Experiences & Products segment lost as much as $ 1.9 billion in the third quarter of 2020. It’s on track to equalize in the fourth quarter with JPMorgan’s forecasts.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
YOU MAY ALSO LIKE THIS:
Is Disney Stock a Buy Now?
Why this IBD tool simplifies the search for the best stocks
Do you want to make quick profits and avoid big losses? Try SwingTrader
Best growth stocks to buy and view
IBD Digital: Unlock IBD’s Premium Stock Lists, Tools and Analysis Today