Source: PaxForex Premium Analytics Portal, Fundamental Insight
One of the things about Walt Disney is that all four of its Florida theme parks and even the resort's two water parks are different. Magic Kingdom offers the largest assortment of attractions, and over the past few years, it has been the most visited theme park on the planet. Disney's Hollywood Studios is a celebration of the movies, and while it was the least visited of the four parks in 2019 - the last full pre-pandemic year - the new rides, introduced just before COVID-19 closed, should keep the turnstiles busy. Animal Kingdom is an animal-themed park that was often criticized as a "half-day park" until it expanded its animal theme to include some of the most intense roller coasters at Disney World and an entire area dedicated to the Avatar franchise.
That brings us to Epcot, the only Disney World park whose attendance hasn't increased in 2019. It opened 40 years ago as a haven of slow-moving educational rides at the front of the park and a series of country pavilions surrounding a massive lake in the back. It was an interesting alternative to Magic Kingdom, radiating a charm it lacked in the thrill rides and character experiences of a similar park. Epcot has evolved over the years, and it is currently in the midst of the most extensive renovation that any Disney World indoor attraction has gone through. Over the past three years, construction walls have fenced off much of the park.
Sometimes to take two steps forward, you have to take a step back. If you can excuse the construction zones at Epcot, it doesn't take long to realize that Disney World's worst park - or at least most flawed resort - is on its way to becoming a star attraction again.
Disney theme parks have been a star in the media giant's financial performance in recent quarters. In last year's second fiscal quarter, Disney's theme park segment revenues domestically nearly tripled, up 182%. The year-over-year comparison isn't difficult, but if you compare domestic park performance to the same three months of 2019, you can see that revenues and operating income are up 16% and 32%, respectively, from pre-pandemic levels.
No park is getting as much attention as Epcot, while Disney World is celebrating its 50th anniversary as part of an 18-month celebration that runs through next March. Late last year, it opened "Remy's Ratatouille Adventure", a family attraction where guests shrink down to the size of a rat as they move around the Parisian restaurant. Later this month, an even larger attraction will open at the other end of the park.
"Guardians of the Galaxy: Cosmic Rewind" is something special. The lavishly decorated indoor roller coaster is more like a next-generation carnival ride with a planetarium show, but that doesn't mean it's cheap. The longest indoor roller coaster in the world is also the most expensive. One industry analyst told Bloomberg that the attraction likely cost Disney about $500 million. No other theme park or regional amusement park operator has that kind of money.
The new attraction focuses on the popular Marvel franchise, and it's the kind of ride that will keep people coming back for the full experience. The attraction has a soundtrack of six different songs released between 1976 and 1985, and each attraction is accompanied by only one of the tracks.
The opening of two major rides at a Disney park within eight months is a very big deal. Epcot also opened a new large-capacity eatery last month, and this follows the lavishly decorated and luxuriously priced Space 220 restaurant that opened last fall.
There's still a lot to do here. Take the monorail that wraps around Epcot Park from the Disney Ticket and Transportation Center, and you'll see beyond the construction walls how much of the park is an area of intense construction. A Moana-based water ride and other attractions will open in the future. Many plans appear to have been shelved, including a Mary Poppins ride, a PLAY! pavilion with several interactive adventures and a multi-level festival center. Since revenues and operating profits are at pre-pandemic levels, it's only a matter of time before Disney management gets its hands on these plans.
Disney theme parks have always been an important part of the giant media company's empire. As media networks undergo evolutionary changes and Disney+ is still a couple of years away from profitability, the increasing burden of growth will fall on the upscale theme park collection. If where Epcot is headed is any indication, the company is in good hands.
While the price is below the 116.00 level, follow the recommendations below:
- Time frame: D1
- Recommendation: short position
- Entry point: 104.86
- Take Profit 1: 99.00
- Take Profit 2: 90.00
Alternative scenario:
If the level of 116.00 is broken-out, follow the recommendations below:
- Time frame: D1
- Recommendation: long position
- Entry point: 116.00/strong>
- Take Profit 1: 129.00
- Take Profit 2: 144.00
