Disney Stock Gets Bruised After Analyst Downgrade

Guggenheim predicts slow growth for Disney's theme park businesses once COVID-19 is over

Deputy Editor
Apr 2, 2020 at 9:37 AM
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Entertainment giant Walt Disney Co (NYSE:DIS) is slipping this morning, down 0.8% at $95.65, after Guggenheim came in with a downgrade to "neutral" from "buy," and slashed its price target to a Street-low of $100 from $160. The analyst said Wall Street is "under-appreciating how long the parts and resorts business may be under pressure," and predicted slow growth once self-isolation measures are lifted. 

Like most of the broad market, Disney has been struggling to stage a rebound off its mid-March five-year lows. While the equity briefly closed its March 12 bear gap, it ran into pressure at its 20-day moving average, with shares continuing to consolidate just below this trendline since then. 

Digging into analyst sentiment, coming into today, most members of the brokerage bunch covering DIS were bullish, with 12 "buy" or better ratings on the table, compared to four "holds." What's more, the consensus 12-month price target of $141.83 is a 49.4% premium to last night's close. 

The options pits, on the other hand, have been more inclined towards bearish bets. This is per DIS' 10-day put/call volume ratio of 1.7 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 96% of all other readings from the past year, suggesting this appetite for long puts is unusual. 

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