S&P Global Ratings has downgraded The Walt Disney Company’s credit rating from an A to an A-minus due to concerns over the ongoing effects of COVID-19. Given the company’s reliance on its theme parks, government-imposed social distancing and consumer concerns about attending public events will further delay the recovery of a rather large sector of the company. Lower theme park attendance in the coming months and years means the company could potentially recover at a slower rate than the overall global economy.
In a report, S&P Global Ratings believes the impact of COVID-19 will persist even after the easing of social distancing guidelines and stay-at-home mandates:
“Disney’s theme parks won’t likely return to normal capacity utilization at the same rate as the overall economy even after stay-at-home restrictions are eased and the theme parks are allowed to reopen.”