May will begin with earnings reports from Walt Disney DIS on Tuesday, CVS Health CVS on Wednesday, and Bristol-Myers Squibb BMY on Thursday.
The coronavirus has become a catalyst for the evolution of the media industry. Walt Disney is one of the many entertainment firms transforming to the beat of the pandemic's drum. Disney+, along with the unique content on ESPN, the firm's 24-hour crown jewel, and the Disney Channel, provides Disney with a cushion during the crisis. Although its iconic theme parks and resorts have temporarily closed, this wide-moat firm profits from the highest affiliate fees per subscriber of any cable channel and generates revenue from advertisers interested in reaching adult males ages 18-49, a key demographic.
After spending over a decade to position itself as a leader in the healthcare sector, CVS faces another battle in the industry: the coronavirus. Two major risks are present for the narrow-moat firm and the health services industry. In the most severe scenario, medical costs could rise and push down profits. Secondly, massive layoffs resulting from shelter-in-place orders could lead to a decline in employer-based membership rolls.
The high need for drugs should support continued demand and supply, leaving Big Pharma and Big Biotech in a steady position during the pandemic. With a strong portfolio of drugs, Bristol-Myers Squibb has built a robust pipeline that promises steady growth potential. We expect medicines and vaccines to emerge, reducing the long-term impact from the coronavirus.
On Friday, we will be looking out for a report on the unemployment rate.