• Disney has seen a complete shutdown throughout various parts of the business which will have significant impacts for the foreseeable future.
• Media Networks is being hit hard with all major sports completely on hold for the foreseeable future.
• Disney Plus is a major winner in all this, growing to over 50m subscribers, but this part of the business is still investing for the future.
• The Studio Entertainment segment has seen all their future films pushed back four months to a year, for films scheduled for 2020 release.
• Looking for a helping hand in the market? Members of High Yield Landlord get exclusive ideas and guidance to navigate any climate. Get started today »

The COVID-19 pandemic has literally impacted every industry outside of healthcare. This has caused chaos in the markets today, and uncertainty. Not knowing the full impact of this pandemic for some time has investors scrambling to figure out whether to sell, buy, or hold their current investments.

Some businesses are being impacted more than others, especially those in the hospitality and leisure industry. Airlines, hotels and resorts, theaters, and theme parks are all completely closed.

This leads me to The Walt Disney Company (DIS), a corporation I admire for their creativity and ability to adapt through the years. This is a testament to the superb leadership the company has had over the years, led by former CEO Bob Iger. Mr. Iger led the company from 2005 to 2020.

However, though I love and adore the company, as an investor, DIS shares do not look attractive at the current price point, and let me explain.

Disney Is Being Severely Impacted By This Pandemic

As I mentioned at the opening, Disney has long been a favorite of mine for years, but I believe the company is going to be impacted severely from this pandemic. The company operates as a leisure company, and with this virus I believe leisure will be one of the last industries to recover.

Let me first lay out the various segments of the business. At the conclusion of 2019, which is the end of Q1 for the company, here is the reporting segments for Disney and there related percentage of revenue and operating income.

Chart created by author

Let’s first touch on Parks & Resorts. As you can see, Parks & Resorts is the company’s most profitable segment with an operating margin of 32%. The segment accounts for 58% of total operating margins for the company. The company closed their Disneyland Shanghai theme park on January 25^th, Disneyland & California Adventure on March 14^th, and Walt Disney World and Disneyland Paris on March 16^th. All parks still remain closed to this day and Disney will begin furloughs, effective April 14^th.

READ FULL ARTICLE HERE