The Walt Disney Company announced that it is raising its layoff plans for its parks, experiences and products segment amid the pandemic. The mass media and entertainment conglomerate has decided to terminate 32,000 workers in the first half of fiscal 2021, versus the layoff plan of 28,000 workers announced in September.
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In its 10K filing, Disney (DIS) said, “Due to the current climate, including COVID-19 impacts, and changing environment in which we are operating, the Company has generated efficiencies in its staffing, including limiting hiring to critical business roles, furloughs and reductions-in-force. As part of these actions, the employment of approximately 32,000 employees primarily at Parks, Experiences and Products will terminate in the first half of fiscal 2021.” The company also said that “as of October 3, 2020, approximately 37,000 employees who are not scheduled for employment termination were on furlough as a result of COVID-19’s impact on our businesses.”
Earlier, the company delivered upbeat 4Q results, driven by strong subscriber additions in its streaming services. Its 4Q revenues declined 23% to $14.7 billion but beat the Street consensus of $14.2 billion. It reported an adjusted loss of $0.20 per share in 4Q, compared to an adjusted EPS of $1.07 in the year-ago period and analysts’ expectations of a loss of $0.71 per share. (See DIS stock analysis on TipRanks)
On Nov. 24, Tigress Financial analyst Ivan Feinseth maintained a Buy rating on the stock, noting, “as the power of Disney+ continues to help cushion COVID-19 headwinds, and a vaccine-driven global recovery from the COVID-19 pandemic creates a significant upside opportunity for DIS’s stock.”
Like Feinseth, the Street also has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 15 Buys and 3 Holds. The average price target of $153.63 implies upside potential of about 3.1% to current levels. Shares were up by 3.1% year-to-date.
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