Weekly Media Notes: Disney’s Star Wars Smashes Box Office Records For A Stellar $500 Million Opening Weekend

by Trefis Team
+11.97%
Upside
109
Market
122
Trefis
DIS
Disney
Rate   |   votes   |   Share

Media stocks remained fairly active last week, with Disney’s (NYSE:DIS) Star Wars: The Force Awakens breaking previous box-office records for a stellar $238 million opening weekend in the U.S. and over $500 million worldwide. Amazon will offer CBS’ (NYSE:CBS) Showtime, along with Starz and other pay-TV services, through its Streaming Partners Program. 21st Century Fox’s (NASDAQ: FOX) Fox News is one of the rare top cable networks that will likely end 2015 with ratings growth. Below we discuss the developments related to these media companies over the last week or so.

Disney

Disney’s Star Wars saw a stellar opening at the global box office, breaking several records. In the U.S. it grossed $238 million, beating the $208 million opening of Jurassic World earlier this year. Globally, it grossed $517 million, a little short of Jurassic World’s $524 million opening weekend. [1] However, the comparison is difficult, as Star Wars hasn’t opened in China yet. China is a big market for movies, and Jurassic World’s opening included China. Star Wars is likely to break more records going forward, which should bode well for Disney’s stock. We maintain our view that the Star Wars franchise will be a massive growth driver for Disney in the coming years, as this is just the beginning of a series of scheduled films. Disney will release one Star Wars-related movie every year for the next half decade (also see – How Did 2015 Turn Out For Disney’s Studio And What To Expect In 2016?). Apart from movies, Disney will earn revenues from Star Wars merchandise sales, video games, content licensing and the upcoming attractions at its theme parks.

See Our Forecast For Disney’s Box Office Market Share

  • Trefis has a $120 price estimate for Disney’s shares, translating into a $200 billion market cap. This is slightly above the market price of $108 seen over the week.
  • We estimate the company’s revenues to be around $52.5 billion and earnings per share to be $5 for the calendar year 2015.

CBS

CBS’ (NYSE:CBS) Showtime, along with Starz, will be available on Amazon’s Streaming Partners Program. This service will be provided by Amazon to its Prime members, thereby making it easy for customers to subscribe to streaming content. Prime customers will directly deal with Amazon for payments, customer support, billing and video streaming. [2] Showtime launched its over-the-top streaming service earlier this year, and expects it to be a significant contributor of revenues in the coming years. The network is home to popular programming such as Homeland and The Affair. The network’s availability on the Amazon platform will offer it a wide base to target, and it will likely attract more subscribers due to a smooth billing process under one umbrella rather than paying for each service separately on a monthly basis. We expect Showtime to have an overall streaming subscriber base of 3.5 million by 2020.

See Our Forecast For CBS’ Cable Networks Revenues

  • Trefis has a $62 price estimate for CBS Corporation’s shares, translating into a $29 billion market cap. This is roughly 35% ahead of the current market price of around $46 seen over the week.
  • We estimate the company’s 2015 revenues to be around $13.7 billion and earnings per share to be $3.20, compared to a consensus of $3.40, according to Reuters.

 

21st Century Fox

21st Century Fox’s (NYSE:DIS) Fox News is one of the three top 10 cable networks that saw ratings growth this year. Fox News averaged 1.8 million viewers in prime time through December 15th, marking a 4% uptick as compared to the prior year period. Other networks that saw ratings growth were HGTV and the Discovery Channel. While ESPN was the most watched network in 2015, its viewership dropped 8%. Fox News has benefited from its U.S. Presidential Election coverage, including the GOP debates. This also aided CNN’s ratings, but its overall viewership is far less than Fox News. [3] Overall, ratings growth at Fox News is likely to aid advertising income for the network. It should be noted that most of the cable networks are seeing declines in ratings amid growth of streaming platforms, so 4% growth for one of the most watched cable networks is impressive.

See Our Forecast For Fox News Subscription

  • Trefis has a $37 price estimate for 21st Century Fox’s shares, translating into a $73 billion market cap. This is roughly 30% ahead of the market price of around $28 seen over the week.
  • We estimate the company’s 2015 revenues to be around $29 billion for earnings per share of $1.64 for the calendar year 2015.

View Interactive Institutional Research (Powered by Trefis):

Global Large CapU.S. Mid & Small CapEuropean Large & Mid Cap

More Trefis Research

Notes:
  1. Star Wars: The Force Awakens, Box Office Mojo, As of Dec 20, 2015 []
  2. Amazon brings Starz, Showtime, AMC to Prime members, The Oceanside Post, Dec 18, 2015 []
  3. HGTV, Fox News Among Only Top Cable Networks to Boost Ratings This Year, The Wall Street Journal, Dec 18, 2015 []
Rate   |   votes   |   Share

Comments

Name (Required)
Email (Required, but never displayed)
Be the first to comment!