Jim Cramer: The Force Isn't With Disney
Is the House of Mouse a House of Pain?
Disney got yet another downgrade on Monday, May 4.
The downgrade came from analysts at MoffettNathanson.
"While Disney has the advantaged assets to win in this new world, we fear that the uncertainty of the present situation creates significant and unrivaled earnings risk for the foreseeable future. The economic impact of social distancing is obviously most severe for the two divisions (Theme Parks and Studio Entertainment) that have driven free cash flow in the recent term. In addition, the acceleration in cord-cutting, coupled with ESPN’s high fixed cost base, could further negatively impact Media Networks. On the brighter side, Hulu and Disney+ should be gaining strength from this crisis, but do not contribute free cash flow to offset the erosion elsewhere," analysts wrote in the downgrade.
Watch the full video above for Jim Cramer's full take.
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