Disney Resort In Direct Path Of Hurricane Milton, Faces $200 Million Hit 

Walt Disney World Resort is in Hurricane Milton's forecasted path. Analysts from Goldman expect closures and disruptions from the storm could cost the entertainment company between $150 million and $200 million this quarter. 

Milton is expected to make landfall in Central Florida late Wednseday night or early Thursday as a powerful Cat. 4 hurricane. Disney shuttered park operations today, and all parks will remain closed on Thursday. 

"Specifically, we estimate a $150 mn - $200 mn adverse impact to F1Q25E Parks & Experiences EBIT driven by a 4 pp adverse impact to domestic attendance growth in F1Q25E based on historical headwinds from hurricanes due to closure and disruption times. For instance, Hurricane Irma in 2017 was a $100 mn headwind to DIS EBIT and a 3 pp headwind to domestic parks attendance with 2 days of closure at Walt Disney World and some cruise ship itinerary disruptions," the team of Goldman analysts led by Michael Ng and Shelby Spencer wrote in a note to clients on Tuesday. 

Ng and Spencer said their F4Q24E estimates (published 9/24/2024) remain unchanged and forecast Disney to deliver F4Q24E EPS of $1.16 (v. Visible Alpha Consensus Data of $1.10) and segment OI of $3.8 bn (in-line with consensus). However, they reduced their F1Q25E Parks and Experience EBIT from the estimated hurricane impact, pushing down the F2025E EPS estimate to $5.14 (v. $5.22 prior and $5.13 consensus), adding, "Our F2026/27 EPS are essentially unchanged on average at $5.96/$7.10." 

They note prior storms, including Hurricanes Ian (F4Q22), Dorian (F4Q19), Irma (F4Q17) and Matthew (F1Q17), forced Disney to shutter resorts for 1-2 days on average. 

The analysts shifted down their F2025 EBIT estimate by 1% due to Milton's likely impacts in the next 12 to 24 hours. They added that estimates in F2024, F2026, and F2027 remain unchanged. 

Despite Milton's current forecast directly impacting Disney's resort, the analysts told clients: "We are Buy rated on shares of Walt Disney Co. Our 12-month price target of $120 (unchanged)..." 

Shares are currently trading at a 26.5% discount versus Goldman's price target.

Furthermore, the analysts noted non-weather-related downside risks for Disney, which include "intensified cord-cutting, sports rights cost inflation, streaming competition, economic slowdown impacting consumer spending, weak theatrical slate, M&A, unfavorable regulatory or policy reforms, higher than expected interest rates and FX." 

Given Milton's strength and trajectory and many meteorologists claiming this storm is one for the history books, the probability that Disney's resort could be shuttered for longer than the projected 1-2 days continues to rise.