Walt Disney shares were down 1.8% around midday Monday after UBS analyst John Hodulik downgraded the stock ahead of the entertainment company’s first-quarter earnings report scheduled in early May.

The downgrade came following news that Disney (ticker: DIS), the world’s biggest entertainment company—owner of movie studios, theme parks and sports networks—will stop paying more than 100,000 employees this week as the coronavirus lockdown weighs on cash flow. With nearly half of its workforce on furlough, Disney is among a range...