How Accurate Are Wall Street Analysts When It Comes to Disney? We Investigate.

After Disney World and other Disney parks around the world closed in 2020 due to the pandemic, many analysts made predictions about when things could reopen, what losses the Company would have, and more.

Disney World

Before and after many of the parks reopened, analysts also weighed in on Disney+, Disney’s stock, and other topics related to the company. But, how accurate have these analysts been? What predictions did they get right and which ones were WAY off? We’re breaking it all down!

Now, we do have to preface this article by saying that predictions are just that — predictions. In other words, these predictions made by analysts are essentially just educated guesses. The coronavirus pandemic, and the virus itself, has been inherently unpredictable. We’re still waiting to see if some of these predictions are accurate. But, with the twists and turns of the pandemic, there’s likely a lot more to come before we can get a complete picture.

EPCOT

Still, it’s interesting to see what some analysts expected, and how things have turned out. So, without further ado, let’s dive in!

Reopening Date

One of the things many analysts weighed in on was when Disney World and other Disney theme parks could reopen. Back in March of 2020, some analysts predicted Disney World could remain closed through mid-April of 2020.

Later, an analyst said that the domestic Disney parks could reopen on June 1st. In April, another analyst predicted that the Disney theme parks wouldn’t reopen until January of 2021! Talk about a lengthy predicted closure.

Animal Kingdom

Others thought Disney World might not open until the fall of 2020. Then, in May an analyst said that Disney World could possibly open in late July. Out of all of the predictions, that ended up being the most accurate.

Disney Springs began its phased reopening in May 2020, but the Disney World theme parks ultimately reopened in July 2020.

Disney’s Hollywood Studios

But it took MUCH longer for Disney’s other domestic theme parks at Disneyland Resort in California to reopen. Disneyland Park and Disney California Adventure Park closed in March of 2020 and didn’t reopen until more than a YEAR later — in April of 2021.

Turns out that the analyst who predicted a January 2021 reopening for the Disney theme parks wasn’t that far off when it comes to Disneyland specifically.

Disneyland

Though Disneyland has reopened, it’s by no means at 100% of its pre-pandemic state. In fact, Disneyland’s own president indicated that Disneyland has “only just reached the halfway point of an extended phased reopening.”

Disneyland President Ken Potrock also shared that it may take “another year before operations fully return to pre-pandemic levels.”

Disneyland

Over at Disney World, many (if not, most) things have reopened, but there are still a number of things missing, like certain buffets, shows, and other offerings like the Bibbidi Bobbidi Boutique.

So while many things are “back to normal,” there are several ways that the impact of the pandemic and pandemic-related closures are still affecting Disney’s parks.

And internationally the impact has been more significant, with parks like Hong Kong Disneyland closing AGAIN for a period of time (and then reopening), and Shanghai Disneyland closing AGAIN (with no reopening date in sight as of right now).

Click here to see EVERYTHING that is closed in Disney World in 2022

Capacity

Aside from when the parks will reopen, analysts had some thoughts about how many people would be allowed in the parks. Back in April of 2020, one analyst predicted that the parks would only operate with 50% capacity all the way through fiscal 2021. Fiscal 2021 started late in 2020 and ended in the fall of 2021. So…how accurate were those predictions and what does capacity look like now?

Hollywood Studios

Well, in November of 2020, Disney shared that the Disney World theme parks were operating at 35% capacity (up from their original 25% limit).

In February of 2021, Disney’s CEO Bob Chapek said that whether Disney would be able to increase capacity would really be determined by the rate of vaccinations of the public.

Spaceship Earth

Then in May of 2021, Disney CEO Bob Chapek shared that the parks would “see low double-digit increases in attendance in the next several months.” At that time, he also hinted that Walt Disney World would likely reach full capacity towards the end of 2021.

In August of 2021, we learned that during the third fiscal quarter of 2021, capacity increased and attendance levels were at or near those daily capacity limits. Disney also shared that they have opened about 70% of the hotel rooms in Disney World, would be increasing capacity as they see an increase in demand, and that they are expecting Disney World to be fully staffed by the end of the year.

Magic Kingdom Entrance Crowds

Following those statements, we had the start of the Food & Wine Festival in 2021, the start of the 50th Anniversary, and more events that brought large crowds to Disney World.

In November of 2021, Disney shared that attendance trends were continuing to strengthen at Disney’s theme parks and guest spending was also up.

Crowds in Magic Kingdom

The Disney Parks then achieved “all-time revenue and operating income records” for the first quarter of the fiscal year 2022. For the fiscal year 2022 (which started back in the fall of 2021), Disney has noted that their domestic theme parks and experiences have been “generally operating without significant mandatory COVID-19-related capacity restrictions.” This was reiterated in the report for Q2 of the fiscal year 2022.

But does that mean that capacity is back to pre-pandemic levels? Not necessarily. Disney does continue to manage capacity through the use of the Park Pass reservation system. In March of 2022, Senior Executive Vice President and Chief Financial Officer of The Walt Disney Company, Christine McCarthy, shared that the parks are NOT yet back to full capacity, but are coming back toward it.

Crowds

But even as capacity increases, things won’t quite go back to what they were before the pandemic. McCarthy said that they are managing things differently now and that they “don’t want to have the parks bursting at the seams.”

Disney CEO Bob Chapek seemed to emphasize this during the Q2 earnings call for the fiscal year 2022. During that call, he said “Chapek said, “We’re controlling our attendance…using our reservation system to optimize the guest experience.” McCarthy shared that Disney is “choosing to limit attendance using [the] reservation system.” McCarthy said that this goes back to Disney trying to “balance demand and attendance throughout the year, not have days when consumers in the parks aren’t enjoying the experience.”

According to McCarthy, they will continue to increase attendance in the parks with capacity as things change.

Guardians of the Galaxy: Cosmic Rewind

Disney doesn’t give exact capacity numbers often, so it’s unclear what exact levels it was operating at the end of the fiscal year 2021, but it seems likely that the numbers exceeded the 50% prediction provided by that one analyst. And things are trending upwards as Disney continues to come back close to full capacity levels.

Click here to see more from Bob Chapek about Disney’s Park Pass system and how they’re controlling attendance

Crowds

One thing is limited capacity. But crowd levels and how comfortable people feel coming back to Disney World is a bit of a separate thing. Analysts have given their predictions on this issue in the past as well.

Slinky Dog Dash Wait Time

Some analysts previously shared that the factors that were likely to improve the feelings of safety around going to Disney World could include the parks significantly limiting capacity, the proliferation of a vaccine, or more testing so those with immunity and antibodies feel comfortable.

One analyst predicted that “crowds are unlikely to return [to Disney theme parks] in full until there is a vaccine widely available.”

Seven Dwarfs Mine Train Wait Time

In some ways, this may have been accurate. In 2020 and 2021, we saw days with EXTREMELY LOW crowds.

But, in other ways, this might not have been entirely accurate. We saw some seriously large crowds take over Disney World during parts of 2020 and 2021, particularly around the holidays. The parks also hit full capacity in February of 2021 and on other dates that followed.

Frontierland Crowds

In line with what that one analyst discussed though, capacity was and is still being managed, the vaccine has been distributed widely (and has been approved for many children), there are even booster shots now available for many individuals, there was a lot of testing available for quite some time, and families can now even request FREE COVID-19 at-home tests in the U.S.

The situation with COVID-19 has also greatly changed over the last several months. From the surges with the Delta and Omicron variants, to a great decrease in cases, to newer increases with the BA.2 and BA.2.12.1 sub-variants, things are not the same as they were a year or two years ago.

©WVNS

Dr. Anthony Fauci, the chief medical adviser of U.S. President Biden, has said that the United States is “out of the full-blown explosive pandemic phase.” Due to the newer Omicron variants, Fauci has said that it is likely we’ll see an uptick in cases, but he doesn’t think we’ll see a surge.

Perhaps some of these changes — greater vaccine availability, booster availability, free at-home testing availability, and those previous reductions in case numbers encouraged crowds to return. Mask rules have changed, and more regulation changes may be encouraging many to travel again.

No face masks

But, there’s much that remains to be seen in terms of what the future will be like. Particularly with the newer BA.2 and BA.2.12.1 variants, and the recent increases in case numbers, things could change again in the future.

©Google

Truly, it’ll be a matter of waiting to see just how the future of this virus plays out and how, if at all, it impacts Disney World.

Click here to see more about the COVID-19 BA.2.12.1 variant

Safety Procedures

In May of last year, one analyst took at look at Shanghai Disneyland’s plans to reopen with queue and ride distancing, new parade procedures, temperature and QR checks, and more.

The analyst predicted that if Disney World follows similar guidelines, parks in the U.S. could open in the summer of 2020. And that, for the most part, was true, at least when it comes to Disney World.

Disney World’s Health and Safety Signs

Disney World did end up adopting many of those health and safety measures — requiring guests to undergo temperature checks, distancing in queues, and more. And the Disney World theme parks did open during the summer of 2020.

Sign on a Table at Pecos Bill in Disney World

But, this was not the case for Disneyland Resort in California. Disneyland Resort closed in March of 2020 and didn’t reopen until at least a year later.

Note that rules at both parks have since changed. At Disney World, masks are now optional in both indoor and outdoor locations, as well as Disney transportation.

©Disney

Disneyland’s mask rules are similar, but they do say that it is strongly recommended that guests wear masks when indoors and in enclosed transportation.

©Disney

Physical distancing is essentially gone in Disney World and plexiglass has been removed at many locations.

At least as to Disney World, those initial analyst predictions were fairly accurate, but things have significantly changed over the last several months.

Click here to get a FIRST LOOK at masks no longer being required on Disney World transportation

Profit and Losses

With Disney’s parks around the world closed for several months, analysts made several predictions about what Disney’s losses and profits could be.

In April of last year, some analysts noted that Disney’s theme parks generated about $6.8 BILLION dollars for the company in 2019. They predicted that number would drop by 92%. Other analysts noted that the Disney theme parks could face a potential $21 BILLION revenue loss throughout 2022.

Pandora

Disney did in fact report some big losses during 2020, and reported BILLIONS in losses for its first quarter of fiscal year 2021.

For fiscal year 2020, Disney reported a net loss of $2.8 billion. Disney acknowledged that the most significant adverse impact from COVID-19 was the impact on operating income from the Parks, Experiences, and Products division because of the closures and limits in operating capacity.

New Orange Bird Mural

But, according to CNBC, the Company “exceeded expectations on revenue and showed less dramatic losses than anticipated” for its fourth quarter of the 2020 fiscal year. Still, according to Disney’s annual report for 2020, the revenue for Parks, Experiences, and Products for 2020 was (in millions) $16,502 overall, compared to $26,225 in 2019 (change of 37%).

Mickey Mouse

For the 2021 fiscal year, we actually saw Disney theme park revenues increase by BILLIONS. For the last quarter of fiscal year 2021, Disney Parks, Experiences and Products revenues increased to $5.5 billion compared to $2.7 billion in the prior-year quarter.”

Magic Kingdom

And things got even better with the start of fiscal year 2022. For the first quarter of fiscal year 2022, Disney’s parks hit an all-time revenue record!

During the 1st quarter of fiscal year 2022, the revenues for Disney Parks, Experiences, and Products increased to $7.2 BILLION compared to just $3.6 billion in the prior-year quarter (meaning the same quarter of the previous year).

©Disney

What about Disney’s latest quarter — Q2 of fiscal year 2022? Ahead of Disney’s latest earnings report, CNBC shared that analysts expected to see $1.19 earnings per share and $20.2 billion in revenue. How accurate were they? Well, when it comes to earnings per share, they were a bit off the mark. Diluted earnings per share for the quarter (excluding certain items) was at $1.08 (an increase from the prior-year quarter).

In terms of revenue, the analysts were a bit closer but Disney fell short. Total revenues for Q2 of fiscal year 2022 were at $19.249 billion just short of the $20.2 billion figure. Overall, Disney reported some BIG park revenue figures (nearly double in Q2 of FY 2022 compared to the prior-year quarter), but stock values have dropped recently and have continued to do so following the release of the report.

As Variety puts it, “Disney missed financial expectations” for the latest quarter.

©Disney

Disney has undoubtedly seen some big losses due to the park closures and the limits on its operations. But things have picked up during the most recent quarters. What will those losses, profits, or revenues be in the future? Only time will tell.

Click here to see all the latest from Disney’s Q2 FY 2022 earnings report.

Spending in the Parks

Analysts have also made some predictions about Disney’s investment in its parks. In May of last year, some analysts predicted that Disney would delay capital expenditures on non-critical theme park projects to curtail its losses. And, in some ways, that has been true.

Runaway Railway

In September of 2020, Christine McCarthy from The Walt Disney Company, shared that Disney is investing in and will continue to invest in its theme parks. But, she also said that the investments will be prioritized to continue certain projects that were already “in flight” like the Star Wars hotel, Avengers Campus in Disneyland, and Mickey & Minnie’s Runaway Railway in Disneyland.

The Star Wars hotel has since opened, as has Avengers Campus.

Doctor Strange and America Chavez at Avengers Campus

Other parks projects were not listed on that “priority list.” And in fact some projects have been delayed or postponed including 2 projects at EPCOT — the Spaceship Earth refurbishment and the Mary Poppins attraction. 

Disney has since shared that some projects — specifically the Mary Poppins attraction in EPCOT and the Quinjet attraction in Disney California Adventure’s Avengers Campus — are “on hold.”

Mary Poppins in Epcot

There really also hasn’t been a lot shared lately on things like the PLAY! Pavilion at EPCOT. And the festival center that was set to come to EPCOT appears to have taken on a different shape as CommuniCore Hall.

But, other projects have been moving along or otherwise opened, including Remy’s Ratatouille Adventure, the TRON coaster, and Journey of Water — Inspired by Moana.

TRON Lightcycle Run

Will other projects get further delayed or postponed? It’s possible. There’s a LOT of work going on all around Disney World, and we’re keeping a close eye on ALL of it.

Click here to see VIDEO of the first full-speed launch of the TRON coaster in Disney World

Streaming

Analysts have also made some predictions about Disney’s popular streaming service Disney+In 2020, there was a change in leadership in terms of Disney’s Direct-to-Consumer division. Kevin Mayer ultimately left a position in this area, and Rebecca Campbell (the former Disneyland President) took over as the Chairman. Some analysts were concerned about this change.

Disney+ Logo ©Disney

One analyst even downgraded his rating of Disney’s stock citing a few concerns, including the loss of Kevin Mayer. Some asked why Disney was putting someone from the parks division in charge of the future of streaming. One analyst also said that Campbell was joining the streaming side of the business “at a moment where the already thin original content pipeline has dwindled to essentially ‘nothing.’”

Screenshot from Disney+ Adult Account

Those predictions were made back in May of 2020. But little did they know Disney had QUITE a few announcements up its sleeves. Just a few months later, on Investor Day, Disney announced a truly RIDICULOUS amount of projects coming to Disney+ and beyond.

We got news about new Star Wars series, Pixar shows, and SO MUCH MORE. Since that time, Disney has also announced a new Marvel docuseries and a new Wakanda series. It has also released classics like Brandy’s Cinderella on the streaming service, and has released shows like Marvel’s Moon Knight and more.

©Disney

And Disney isn’t stopping there. Disney has shared that they plan to release 100 titles every single year. So, it seems Disney+ doesn’t quite have a “thin original content pipeline [that] has dwindled to essentially ‘nothing.’” 

In terms of subscriber growth, Disney+ subscriber numbers have continued to go up. As of January 1st, 2022, Disney+ has grown to 129.8 million total subscribers. That’s a 37% increase since the same time last year. These numbers actually exceeded some analysts’ expectations.

Sand sculpture Disney+ logo

According to CNBC, ahead of the Q2 report for FY 2022, analysts predicted that Disney+ subscriber numbers would be around 135 million. Disney EXCEEDED that and ultimately reported 137.7 million total Disney+ subscribers as of April 2nd, 2022. Analysts were close in their prediction, but Disney managed to beat it with just a few million more.

Some analysts have been optimistic about Disney+’s growth. Back in October of 2021, some analysts predicted that Disney+ would have more subscribers than Netflix by the year 2025.

But it hasn’t all been smooth sailing. In October of 2021, some analysts were concerned about Disney+ and some continue to be concerned about slower subscriber growth. With Netflix announcing the loss of 200,000 subscribers and the expectation that they’ll lose millions more, concerns regarding Disney+ may have intensified.

©Disney

Bloomberg has noted that these troubles with Netflix could cause investors to “question whether the later-arriving media companies will sign up enough customers to justify all the money they are spending on fresh programming.” But recent reports of higher than expected subscriber numbers may have quelled some of those fears.

We have also seen Disney stock dropping in recent weeks, which could reflect concerns on the streaming side, as well as other things. Disney itself “expects Disney+ subscriber net adds to be stronger in the second half of its fiscal year 2022 than in the first half…but that may not be ‘as large as previously anticipated,’” according to McCarthy. (Variety) Only time will tell just how many more subscribers Disney+ will get and whether it can shake off investors’ fears stemming from what happened with Netflix.

Click here to see the latest Disney+ subscriber numbers

Disney Stock

According to Fox News, Disney could have one of the worst-performing stocks of the year. As we noted above, stock values have been dropping to levels the Company hasn’t seen since May of 2020.

Disney stock hit an all-time high at nearly $200 per share back in March of 2021. But, things look pretty different right now.

A Classic Mickey Pretzel

On April 22nd, Disney stock closed at $118.27, but fell after hours to $117.88.In May of 2022, the stock had fallen to around $108.49.

©Google

Following the earnings report, Disney’s stock has continued to fall. As of May 12th, the stock was trading around $103.

Despite reporting some big parks-related revenue and a greater-than-expected Disney+ subscriber number, Disney missed some financial expectations when it comes to overall revenue and earnings per share. That and other fears could be impacting stock value.

©Google

How Disney stock will perform in the future will likely depend on a number of things including streaming success, investors’ thoughts surrounding the Company in light of recent controversies like the Reedy Creek Improvement District situation, and more.

Click here for more updates about Disney stock

Analysts have made a lot of predictions over the past year — some have been pretty accurate, and others…not so much. But, that’s the thing with predictions — they are educated guesses based on the information you have at the time. With things changing so rapidly, it’s often hard to make predictions that will hold true at the end of the day.

Haunted Mansion

We’ve seen lots of other predictions made over the past year, but it’s too soon to know whether many of these will come true. Some analysts have predicted that Disney+ will reach $4 billion in revenue by 2022. Other predictions note that Disney’s earnings might not return to normal levels until 2024, or that international tourism may not return to normal until 2024.

How accurate will these predictions be? It’s unclear. We’ll definitely keep an eye out for more updates and let you know!

Click here to see what some analysts have to say about stripping Disney World’s power with the Reedy Creek Improvement District situation

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How accurate do you think these analyst predictions will be for the future? Tell us in the comments.

The post How Accurate Are Wall Street Analysts When It Comes to Disney? We Investigate. first appeared on the disney food blog.

source https://www.disneyfoodblog.com/2022/05/14/how-accurate-are-wall-street-analysts-when-it-comes-to-disney-we-investigate/

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