There was once a time in the United States when a trip to Disneyland was part of the summer vacation standard. But those times are increasingly changing, and many today despair of the chance to ever return. And that’s not helping Disney (DIS) shares, down over 2% in the closing minutes of Monday’s trading. The price of a Disney experience these days is, for a lot of families out there, downright impossible to fit into a budget. So Disney, facing a decline in park attendance, is working to turn things around because a couple dozen super-wealthy people a day do not make for a working theme park.
Disney is paring back hotel rates, offering summer dining plans, and even lowering ticket prices on some of its parks in a bid to draw regular people back to the park. Given that prices of a one-day park hopper ticket had risen as high as $254 each, it was clear something needed to be done. The discounted ticket is $154 but only allows access to Hollywood Studios, Animal Kingdom, and EPCOT. Adding actual Disney World to that will run another $109 per day minimum, which actually makes prices higher overall.
Fixing the Wrong Problem
While families are left with the terrible choice of seeing Disney for a couple of days or buying an entire television, Disney has announced that the animatronic character “Liver Lips McGrowl” is no longer a part of the Country Bear Jamboree. A recently concluded seven-month refurbishing effort saw the character removed, as his name was considered “derogatory” to alcoholics.
Meanwhile, Disney is facing a potential strike, as several Disney unions—representing over 14,000 workers—authorized a strike and are ready to walk out. If a strike does take place, it would be the first in over 40 years. The strike is calling particular attention to labor practices, as workers say they’re subject to “…intimidating, surveilling and unlawfully disciplining members…” However, a strike could still be averted through negotiation.
Is Disney Stock a Buy or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DIS stock based on 21 Buys and five Holds assigned in the past three months, as indicated by the graphic below. After a 9.09% rally in its share price over the past year, the average DIS price target of $128.04 per share implies 35.95% upside potential.
