Why You Shouldn’t Be Concerned Over Disney’s Tussle With Florida

DIS stock - Why You Shouldn’t Be Concerned Over Disney’s Tussle With Florida

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Disney (NYSE:DIS) stockholders find themselves in a spot of bother amidst the company’s cultural war with Florida. Florida State revoked Disney’s special tax privileges apparently when the entertainment giant spoke against its gender identity education law. Despite the legal headwinds, though, analysts remain bullish on DIS stock.

Florida governor Ron DeSantis approved a bill along with fellow Republicans to strip Disney of its special district status. The move essentially abolishes the Reedy Creek District Act, which came into effect more than half a century ago.

Hence, Disney will lose its right to a self-governing jurisdiction and won’t be allowed to run a city around the park effectively.

Disney and Reedy Creek have cited the measure as illegal. A statement by Reedy Creek to its bondholders states that the law is essentially enforceable only when the state pays up a whopping $1 billion.

Additionally, you’d have the counties of Osceola and Orange having to bear multiple service costs, which Disney covers.

Is Disney Stock a buy then? The consensus analyst suggests that the stock remains a screaming buy, especially after the pullback. For instance, BofA Securities states that the drop in the stock’s value is an excellent buying opportunity. The research firm says the company is seeing remarkable recovery in its theme park.

Moreover, Morgan Stanley (NYSE:MS) is also bullish on Disney’s theme park business. Its analysts believe that it “may be in year one of a historically strong period of growth for its parks business.”

Hence with DIS stock down over 15% this month, it is perhaps an ideal time to pick it up on the dip.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.


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