Disney is facing a double-edged sword.
Shares of the entertainment giant climbed less than 1% on Monday after the company reopened parts of its Disney World theme park in Florida over the weekend.
Public concern has grown around the reopening as coronavirus cases in the state continue to rise. Florida broke the record for one-day case counts for any state with 15,300 new cases on Sunday and saw its largest one-day spike in virus-related hospitalizations on Friday.
But Disney is facing a dilemma: Theme parks were its biggest profit maker, and with operations stalled, revenues are put at risk — so, despite calls from employees to delay the reopening, the company is plowing forward.
As for the stock, which climbed nearly 2% on Friday and almost 7% over the course of last week, it still appears to have room to run, Mark Newton, the president and founder of Newton Advisors, told CNBC's "Trading Nation" on Friday.
"Momentum right now is still pretty positive off those lows, and really, the stock is not all that overbought," he said. "A lot of how the stock is going to trade largely, I think, rests with vaccine hopes and/or hospitalization rates, and it's really going to be, to some extent, dependent."
"Technically speaking, it is something to own," Newton said, citing the above chart. "We all know the market is forward-looking. If we have, in fact, seen the worst and we can see, at least, lower rates of curves and things flattening out, then I think the stock likely is going to be good to own at least into the fall and potentially into year end."
Disney shares were trading just below the $120 level early on Monday. Newton said his technical target was near $128, which would represent a 7% increase from the stock's current levels.
A move above $128 could "open things up for a move up to 140-150," which is between 17% and 25% higher than where Disney is now, Newton said.
On the flip side, "we have to watch for any move under 107 if things don't materialize as expected," Newton said. "That would be detrimental. But for now, I do like the stock, and I would own it for the weeks ahead."
Chad Morganlander, senior portfolio manager at Washington Crossing Advisors, agreed with Newton's call.
"We would be invested in Disney. In fact, we own this in our all-cap value portfolio," Morganlander said. "We believe that due in part to the coronavirus, we're path-dependent on a therapeutic as well as other medical treatments."
Morganlander predicted that the theme parks would see improvement over the next 12-24 months, backed up by strength in Disney's digital ventures.
"As an investor, we'd look two to three years out for this story," he said. "We think that this could do very well in this type of environment as we start to improve."
Disclosure: Washington Crossing Advisors owns shares of Disney.