Disney's (DIS) 'Star Wars: Episode VII The Force Awakens' Could Gross $2.2B Globally, Stifel Forecasts

August 3, 2015 7:28 AM EDT
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Stifel analyst Benjamin Mogil reiterated a Buy rating and lifted his price target on Walt Disney (NYSE: DIS) to $130.00 (from $120.00) in advance of both earnings and as they gear towards expectations for "Star Wars: Episode VII The Force Awakens" on December 18th. The analyst views an aggregate global box office of $2.2 billion for "The Force Awakens" as achievable ($700mn domestic/$1bn ROW excluding China/$450mn China). This would make it the second highest grossing film of all-time, behind "Avatar" and its $2.788 billion of total global box office.

Mogil views two major variables for performance of the film: 1. exchange rate movements into the release date, and 2. the duration between the global release date and the Chinese release date, which will to some degree govern Chinese box office performance.

Looking at the numbers, the analyst benchmarked "The Force Awakens" to "Avatar" and some of the other recent global blockbusters. Since the release of "Avatar" and other films, there have been a significant number of industry tailwinds, the analyst notes, including:

  • Domestic Tailwinds: Since 2009, the number of IMAX (370 at the end of 2Q15) screens has nearly doubled and the number 3D screens (16,146 at the end of 4Q14) has nearly quadrupled.
  • International Tailwinds: Since 2009, major international markets such as China, Russia and Latin America have seen significant screen and box office growth. China, Russia and Latin America have increased their screen count/box office by +400%/+430%; +80%/+70%; and +180%/+75%, respectively since 2009.

The biggest headwind will be foreign exchange. "In all markets, except China, the exchange rates are more adverse than when the previous top grossing film aired in the market," the analyst notes.

For an analyst ratings summary and ratings history on Walt Disney click here. For more ratings news on Walt Disney click here.

Shares of Walt Disney closed at $120.00 yesterday.

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