Schaeffer's 43rd Anniversary Stock Picks in 2024

Disney Stock Higher Despite Temporary Park Closings

Disney stock was oversold heading into today

Laura McCandless

Deputy Editor

Mar 13, 2020 at 11:08 AM

As the travel industry continues to struggle, Walt Disney Co (NYSE:DIS) is up 3.7% to trade at $95.27. Disney announced it will close its resorts in California, Florida, and Paris, France starting March 15th, 2020 until the end of the month in order to help prevent the spread of coronavirus. The cruise line is also suspending new departures until April. Three analysts have lowered their price targets. Two of them, J.P. Morgan and Rosenblatt Securities, lowered theirs to $140.

DIS is fighting back from a recent bear gap that ended in a four-year low of $91.64 yesterday, March 12. Disney stock is still down 31% year-to-date, and late last month breached long-term support at its 320-day moving average. Plus, Disney shares sport a 14-day Relative Strength Index (RSI) of 22 -- firmly in "oversold" territory, suggesting it may have been due for a short-term bounce.

In the options pits, puts have picked up in popularity. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 1.70 puts have been bought for every call in the past 10 days. This ratio sits in the 100th percentile of its annual range, suggesting the appetite for puts is higher than usual. Today is more of the same; 115,000 puts have crossed the tape already, four times the average intraday volume, with the April 17 put the most popular.

Echoing this, DIS' Schaeffer's put/call open interest ratio (SOIR) of 0.85 sits in the 97th percentile of its annual range, meaning short-term traders have rarely been more put-biased during the past 12 months.

UPDATE 5-Disney shutting theme parks in California, Florida over coronavirus - Reuters News

12-Mar-2020 09:24:24 PM

To view this story on Eikon, click here

Adds details about Florida, Paris theme parks closure

By Lisa Richwine

LOS ANGELES, March 12 (Reuters) - Walt Disney Co DIS.N will close its theme parks in California and Florida and its resort in Paris from this weekend through the end of the month due to the global outbreak of coronavirus, the company said on Thursday.

Disney Cruise Line will suspend all new departures starting Saturday through the end of the month, the company said.

"We are proceeding with the closure of our theme parks at Walt Disney World Resort in Florida and Disneyland Paris Resort, beginning at the close of business on Sunday, March 15, through the end of the month," the company said in a statement.

Disney earlier had said that its Disneyland and California Adventure theme parks in Southern California would be closed from Saturday.

The hotels at both Walt Disney World and Disneyland Paris will remain open until further notice, the company added.

The company's theme parks in Hong Kong, Shanghai and Tokyo remain closed after being shuttered earlier this year in response to the coronavirus outbreak, which started in China.

Disney's stock ended down 13%, on a day when Wall Streets major indexes all slumped about 10%.

No cases of COVID-19, the disease caused by the novel coronavirus, have been reported at the parks in Anaheim, California, a company representative said in a statement. The announcement coincided with statewide restrictions on public gatherings ordered by California Governor Gavin Newsom.

Comcast Corp's CMCSA.O Universal Studios theme park near Los Angeles also will close on Saturday with plans to reopen on March 28, the company said.

Newsom ordered a statewide ban on most non-essential gatherings of more than 250 people, including sporting events, business conferences and concerts, but his directive exempted casinos and theaters, as well as theme and amusement parks.

Disney said it decided to voluntarily close its Southern California parks "in the best interest of our guests and employees" after reviewing Newsom's directive.

As of Thursday, 198 coronavirus cases have been documented in California, including four deaths, Newsom said.

California is one of a handful of states, along with New York, that have adopted such drastic "social distancing" measures, designed to limit transmission of the highly contagious respiratory virus by curtailing close contacts among people. Ohio and Maryland have ordered statewide closures of public schools.

Disney-run hotels in Anaheim will remain open through Monday to give guests time to make travel arrangements, the company said. Disney will pay its employees during the shutdown and refund payments for hotel bookings, it added.

Located about 30 miles (48 km) south of Los Angeles, the two Disney parks drew 28.6 million visitors in 2018, according to the Themed Entertainment Association.

Disneyland, which opened in 1955, is nicknamed the "Happiest Place on Earth." The adjacent California Adventure park was added in 2001.

After Disney's announcement, S&P revised Disney’s credit outlook to negative from stable, citing event cancellations and travel restrictions due to coronavirus.

"The negative outlook on Disney reflects the increased uncertainty around the extent of the impact of the coronavirus crisis on the global economy,” S&P said.

It is unusual for Disney to close its theme parks. Brief shutdowns have occurred due to hurricanes and following the Sept. 11, 2001, attacks in the United States.

The company estimated in February that the shutdowns of Shanghai Disney Resort and Hong Kong Disneyland alone would cost $175 million if both remained closed for two months. (Full Story)

(Reporting and writing by Lisa Richwine in Los Angeles; Additional reporting by Steve Gorman in Los Angeles and Sabahatjahan Contractor in Bengaluru; Editing by Daniel Wallis, Lisa Shumaker and Leslie Adler)

(( lisa.richwine@thomsonreuters.com ; Follow me on Twitter https://twitter.com/LARichwine; 1 310 491 7275; Reuters Messaging: lisa.richwine.thomsonreuters.com@reuters.net ))

Keywords: HEALTH-CORONAVIRUS/DISNEY (UPDATE 5, PIX, TV)

nL1N2B5396

©Refinitiv 2020. All rights reserved. The Refinitiv content received through this service is the intellectual property of Refinitiv or its third party suppliers. Republication or redistribution of content provided by Refinitiv is expressly prohibited without the prior written consent of Refinitiv, except where permitted by the terms of the relevant Refinitiv service agreement. Neither Refinitiv nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon. Refinitiv and its logo are trademarks or trademarks of the Refinitiv group of companies around the wor

Follow @Schaeffers

Nvidia’s Quiet $1 Trillion Pivot (ad)

Nvidia and its powerful chips are the face of artificial intelligence.

But while everyone’s patting Nvidia on the back for record earnings…

It’s quietly moved on to the next phase of AI it plans to conquer…

Nvidia recently unveiled essential blueprints for this crucial $1 trillion pivot.

Click here now and find out about the three companies Nvidia absolutely needs to succeed in this vital new AI frontier. (ad)

🚀 Try Options Under $5 Trade Alerts
Target +150% Profit w/RT Entry&Exit

This stock is paying its highest dividend
in 15 years . . . 📈 (c/o Investors Alley)

Top 10 Investment Picks Poised For
Major Upside Before 2025 💰 (FREE)

ad
Some of Nvidia’s partners have already
surged as much as 4,744%. This is next …
ad