Coronavirus Slams Stocks, Could Impact Disney Earnings, Analyst Warns

Click here to read the full article.

The Coronavirus is hitting markets hard Monday with gambling, travel and selected tech stocks taking the hardest punches but other pockets feeling the jitters too — like Walt Disney. The entertainment giant closed Shanghai Disneyland indefinitely last week, causing one financial analyst to ring a warning bell.

“We note the closure comes at a lucrative and peak travel time to celebrate Lunar New Year on 1/25, and the Holiday season extends into February. We also see a potential impact to Disney’s Studio business as theaters across most of the country have been closed, which if still in effect, would impact the anticipated release of Mulan in March,” according to a report out this morning by J.P. Morgan analyst Alexia Quadrani.

More from Deadline

• Economic Impact Of Coronavirus Will Likely Top $40 Billion, As Theme Parks, Restaurants And Theaters Go Dark

• Coronavirus: China Shutters Cinemas, Blockbuster 'Lost In Russia' To Stream Free Online After Deal With TikTok Owner

• Shanghai Disneyland Closing In Response To Coronavirus Outbreak

She said she’s keeping her estimates unchanged ahead of guidance from the company expected during an earnings’ conference call on Feb 4.

Chinese officials have confirmed more than 2,700 cases of the virus and 80 dead. The U.S. Centers for Disease Control and Prevention have flagged five cases Stateside. But the biggest impact by far is in Asia.

The virus originated in Wuhan, China, which is four to six hours from Shanghai Disney by train or two hours by plane, Quadrani noted.

Disney is monitoring the situation with the local government.

China’s movie theaters closed Jan. 24 after major distributors canceled their films’ releases ahead of the holiday weekend due to the virus outbreak, she said. Disney is slated to release its Mulan live- action remake March 27 in the U.S., and while there is no official China release date, Quadrani noted that The Lion King 2019 live-action remake was released last July a full week earlier in China.

Quadrani believes downward pressure on earnings will be limited relative to the company’s overall financials and that investors are still primarily focused on the “outsized” success of streaming service Disney+.

Disney share were off 2.75% at $136.23 in midday trading, losing more than the broader indexes, which were also down.

Best of Deadline

• Peacock Programming: List Of NBCUniversal Streaming Service’s Series, Films, Sports, News & More

• Stan Lee's Legacy: Ranking The Hollywood Heroes Co-Created By The Marvel Comics Icon

• Disney-Fox Deal: How It Ranks Among Biggest All-Time Media Mergers

Sign up for Deadline's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.