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Disney Castle with fireworks.

No one is exactly sure at this point when Disney World might reopen its doors to the general public, but one prediction from a major financial analyst is pretty bleak. John Hodulik, a managing director at UBS, a leading financial firm, published a paper this past week outlining projections for Disney’s stock. In it, he estimated the parks, which have been closed since Mid-March, won’t open their doors to the general public until January of 2021.

Now that is an upsetting forecast. If you’re a Disney fan, there’s just no way to look at a prediction like that and not get the chills. So, let’s talk this out and try to see how much weight we should put into this one specific analyst.

First, yes, UBS absolutely is a reputable company and a big deal. It’s an investment bank and financial management firm that reported earnings of more than $30B in 2018. When its analysts make projections on the long-term health of a company, people listen. As such, there’s enough reputation here that you should not dismiss it offhand.

But why is UBS so pessimistic here? Well, according to USA Today, which received a copy of the full report, Hodulik estimates stadiums and theme parks will be among the absolute last businesses to reopen as part of the US government’s plan to gradually send more people back to work. In addition, Disney is a unique case because its theme parks contain many smaller businesses inside them, from restaurants to hotels to shared space rides. All of these are likely to have different rules and regulations they will need to enforce in order to open. Here’s a portion of his quote…

We believe Parks' profitability will be impaired for a longer period of time given the lingering effects of the outbreak and now assume an opening date of Jan. 1 as our base case… That said, the economic recession plus the need for social distancing, new health precautions, the lack of travel and crowd aversion are likely to make this business less profitable until there is a widely available vaccine.

Now, it’s hard to disagree with the business being “less profitable” for the foreseeable future. A great many people are out of work right now and struggling financially. Disney is not cheap and when it opens, there will likely be some who would have attended that will hold off for monetary reasons. In addition, there’s likely to be less people willing to travel because of concerns over getting infected. That same attitude will likely apply to theme parks, as well. Also, whether there are government regulations or not, it’s likely, barring a vaccine, that Disney will choose to reduce capacity both on rides and in the parks themselves. All of that will cut into profit.

But even given all of that, January still seems like a very, very pessimistic estimate. Florida has already shown a willingness to start opening back up segments of its economy. Another analyst from JP Morgan, which is extremely credible in its own right, told Barron’s she thinks the parks will be back open at the beginning of June. Disney is currently accepting reservations for stays in June, as well.

Disney has been very open about its willingness to institute new safety procedures and/ or change other policies in order to reopen. Former CEO Bob Iger has reportedly jumped back into the deep end in an effort to help guide the company through these trying times. Whenever the parks do reopen, it’s likely we’ll see temperature checks, alterations to capacity and other measures design to stop the spread and keep visitors as safe as possible.

I’m not a financial expert. I’m just a Disney enthusiast who reads up on this stuff a lot. My guess is we’ll see Disney World open either in June or July, provided there’s not some new outbreak or big step backwards with COVID-19 in the next month. I think Florida will work with Disney World to make it happen. My guess is California will be more conservative in opening things back up, and Disney will be fine with that in order to focus its efforts on reopening Disney World as safely as possible. That being said, January still seems like a pessimistic date for Disneyland too. I’ll guess September with a lot of new rules and restrictions.

We’ll keep you updated as this is an ongoing and evolving situation.