If profits and record sales drives this market. Every investor should own Disney for the long hall. Already above 88.00+ in after market. (with high volume) Lets see where guidance takes the stock.
Take a few minutes and read the articles for ESPN and the World Cup. It has broken most records and looks to continue to add on views as the competition continues into finals. Another reason Disney has been so strong lately and continues to move higher. The movie Maleficent is breaking through 600 million world wide. The last quarter of the year is looking very strong.
ESPN is expected to bring in some major revenue with the soccer matches. Frozen continues its run in Japan adding unexpected bottom line profits. The Frozen dvd/digital sales are still tracking at number 5 months after its initial release. The stock remains in a consolidation and should jump into new highs shortly. There has been some institutional selling here (why, I don't know) with the stock poised to go higher, much higher. Let's see how "Guardians of the Galaxy" plays out. Guardians could be the next major breakout point when released.
In my opinion Star Wars has not been calculated into the share price of Disney. The Star Wars franchise is just beginning to redevelop. The product and merchandise ramp up to the movie release next year looks like all areas will be ready to go. After all it has several generations of fans out there plus a whole new global market. Disney will not be caught short on merchandise like it was with Frozen.
Frozen took in another 7.4 million in Japan. It was up 8% from the previous week according to the Hollywood Reporter. It is really amazing with the gross box office at 208 million and growing. The Disney Studios is having another profitable quarter.
Starting with the budget at 215 million with the Lone Ranger and only an estimated 160 to 170 million for Maleficent. Now we move to opening WEEKEND in North America with the Lone Ranger at 29 million vs an estimated FIRST DAY with Maleficent at 24 million. Just a few days ago there were a few reviews questioning how much Disney was going to write off on Maleficent. It may have been the same reporters calling "Frozen" a one trick pony for Disney. I suspect some reports or news on Disney are slanted to "short selling" in advance of a movie release which could reflect poorly on the stock price. Here is my take: The Lone Ranger had a limited market while on the other hand Maleficent is the back story to Disney's Sleeping Beauty. Sleeping Beauty already has a built in adult market for all who have seen it previously and their children plus the grand children. The movie may not play well to the young kids it will play to the teen market.
That is all Disney needs to make this successful as well as profitable. It is not another Lone Ranger and should take in more than twice the gross with a lower cost basis.
So I see what you see in Disney. It just pays to mention Frozen in Japan just broke another record in it's ninth week at number 1 and passing the 164 million mark. It is reported being off only 36% from last week. I also spoke to a friend who works at a Disney Store and they still can't keep the Frozen merchandise in stock. How many little princesses will want a Halloween costume this fall. JC Penny has an "Olaf" stuffed plush selling for 299.00 (on sale from 500.) and the thing is huge at about 5 feet tall.
Next up is Maleficent which is a bit dark for the young children but it should play well to a female audience. It will be compared to the Lone Ranger which ended up with 260 million worldwide box office. (not too bad considering how it was panned in North America) The Lone Ranger opened up in the 4th quarter of the year as opposed to 3rd quarter with Maleficent. The 4th quarter has another "Planes" movie (which I don't expect a lot from) and Guardians of the Galaxy coming August 1st. Guardians could put the icing on the cake for this fiscal year at Disney. If it plays as well as expected I see the stock moving past the 100 dollar mark this fall in (as you mentioned next years line up of potential billion dollar movies. You can add a higher number into the interactive division with a huge stable of Marvel, Pixar, and Star Wars characters. That division was in the red in a big way only a couple of years ago and now is adding a tidy profit to the bottom line Interactive could be a billion dollar division by 2016.
Lets not forget "Avatar" Land in the Animal Kingdom Park. Disney has been hard at work developing Animal Kingdom into a full time park by adding future night time entertainment. While this may not be huge overall it will make a difference in consistency just as "Cars Land" added to Disneyland.
The magic of Frozen continues in Japan just passing the 156 million at the box office. The Frozen soundtrack album again is #1 with over 100,000 in sales (13th week at #1). A recent article in Forbes after the earnings report questioned Disney's ability to continue with higher profits. Basically called Frozen a one trick pony for Disney. How wrong can a professional be? Dead wrong in my opinion. Frozen plays across most of Disney's divisions. Frozen plays in a similar way Cinderella continues to play today over 60 years after its first release. The princess and the music is worth banking on for years to come! Many years.
Take your certificate to a copy center and make a high quality copy of it for a couple of dollars and buy a frame and stick it on your wall. The ten shares you own are worth about $800 and you will not be able to transfer or sell that certificate without sending it in. It's all book entry now and stock certificates are a thing of the past. The redemption process takes a few weeks so be prepared for a bit of a wait. Make sure you get the directions on the process and insure/register your certificate at full value.
The DVD gets released and the soundtrack vaults up from about 100,000 a week to over 200,000 copies sold. No one at Disney expected anything like this. Oh yes, they new it would be good but this is an unexpected profit maker for Disney. The first day sales of the Frozen DVD were 3.2 million "FIRST DAY"!!!!! All this is going on in the Jan to March quarter. Expect the bottom line to expand and also expect upgrades and new price targets for the Disney stock. Now lets see how Captain America Winter Soldier does. It has already opened in about 50% of foreign box offices this weekend with a take of 75 million. Next up North America.
I have been waiting for the stock to back up a bit and was able to add more shares this morning at 77.54. The market drives everyone crazy but Disney will continue to churn cash. The recent acquisition of Maker Studios is a good strategic move since it keeps them in the multi media market. They are buying the company for 500 million out of cash flow or on hand cash. If and only if the performance continues to increase they will pay up (400 Mil) for better numbers. It makes sense short and long term. In my opinion the stock will be in the high 80's by May heading for the 90's by the end of the year. So when it backs up just add more to your holdings.
Expect a positive spin at the shareholders meeting. With the release of "Frozen" to the home market it seems reasonable to see a nice increase to the 2nd quarter of 2014 (Jan-Mar) income results. Charting indicates the stocks next point to be north of 86.00. If results are a lot better than expected and the upcoming movies play well at the box office, 90.00 looks like a reasonable target.
The Digital download is available now. It will be interesting to see how Disney reports the combination sales of the various release media. The digital download is 19.99 with very low physical costs. How much profit does Disney make on the virtual version. All this comes in the 2nd quarter of 2014. (Jan, Feb, Mar). Bottom line expectations may be underestimated by the analysts. Frozen could very well be the biggest and fastest since the Lion King. March 15 is the Japan theater release and should break previous box office records there. Good consolidation of share price at 80.00. We will know better by March 15th. Next stop 90.
It makes no difference that anyone would buy more at 45 than 90. It is a matter of actual dollar amount invested. You can purchase stock for as low as 4.95 per transaction so it just isn't necessary to split the stock. One thousand dollars in is one thousand dollars and the stock moving up does so at the same percentage. Just buy and hold and you will do just fine as it heads to 100.
If Disney closes here the next resting point is over 80.00.