Disney Stock Climbs Again, But Don’t Credit Disney+ This Time

Disney receives another boost of good news as theme parks prepare to re-open in California.

Disney Stock Parks Reopen Raya and the Last Dragon
Disney stock is on the rise once more and this time it doesn’t have to do with Disney+ Pixabay

On Friday morning, Disney’s share price hit a daily low of $183.71. As of this writing, it has skyrocketed to $200.04, a rapid nine percent improvement. Over the last year, streaming service Disney+ has been the sole driver of Disney’s remarkable Wall Street surge. The arrival of new Disney animated film Raya and the Last Dragon on Disney+ Friday certainly helped the overall cause. But the stock’s recent improvement has less to do with Disney+ and more to do with a crucial pandemic development for the Mouse House.

California Health and Human Services Secretary Mark Ghaly announced Friday that Disneyland Resort in Southern California will be allowed to reopen with capacity limits beginning April 1. Considering that roughly one-third of Disney’s annual revenue is derived from its parks division under normal circumstances, this is a huge boon for the company.

“Compelling move higher for Disney on Monday as California announced a reopening of theme parks with limited capacity,” David Keller, chief market strategist at Stockcharts.com, told Observer.

Industry observers will remember that Florid’s Walt Disney World Resort reopening with limited capacity back in July 2020 provided a similar effect. California’s COVID-19 protocol has been far stricter than Florida’s, leaving Disneyland shuttered since March of last year.

In 2019, domestic parks and resorts revenue exceeded $17.3 billion on the year, underscoring how important the division is for Disney’s margins. But as the company continues to reorient itself around direct-to-consumer business, Disney+ remains the high-upside priority moving forward.

“The long-term story for Disney remains positive, however, not due to theme parks but because of an impressive pivot into streaming video through their Disney+ offering,” Keller said. “The fact that the stock has been able to outperform the S&P 500 by double digits in the last four months while theme parks have been shuttered reaffirms this is a stock that provides exposure to both ‘work from home’ and ‘reopen the economy’ themes. Overall, the trend remains constructive as long as the price remains above recent lows around $180-185.”

WandaVision recently completed its successful nine-episode run on Disney+. On March 19, Marvel’s The Falcon and the Winter Soldier will debut, continuing a chain of consistent Marvel entertainment throughout 2021.

Disney Stock Climbs Again, But Don’t Credit Disney+ This Time