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'Star Wars: The Force Awakens' Was A Huge Success, So What Happened To Disney's Stock?

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'Star Wars: The Force Awakens' Was A Huge Success, So What Happened To Disney's Stock?
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Over the weekend, "Star Wars: The Force Awakens" dominated headlines as one of the most successful movie openings in the world.

The film made $248 million during its U.S. opening and raked in $281 million overseas. Both figures far surpassed expectations and the majority of analysts say the momentum surrounding the film will likely continue through the holiday period.

However, that positive sentiment was not reflected on Wall Street, where shares Walt Disney Co (NYSE: DIS) tumbled.

Declining Stock Price

Over the past five days, Disney shares have fallen 1.37 percent despite excitement over the latest "Star Wars" film. Instead, this drop continued as part of a larger trend in which Disney's stock has declined 5.35 percent over the past six months.

Related Link: Here's What The Street Thinks Of Disney After 'Star Wars' Record-Breaking Weekend

While "Star Wars"-mania proves that Disney made a smart buy in 2012 by purchasing Lucasfilms, many analysts say worries about a significant decline in the media sector outweigh the benefits of a successful film.

Turbulence For Traditional Cable

The past year has been filled with reports of dwindling numbers of cable subscribers and concerns that traditional cable is on the way out.

Streaming services like Netflix, Inc. (NASDAQ: NFLX) have changed the landscape for TV viewers and many worry that networks like Disney will be unable to cope with the change.

Analysts Negative On DIS

Investment firm BTIG cut its rating for Disney from Neutral to Sell, saying that the firm's earnings-per-share growth is expected to slow in the coming years. The firm also criticized Disney for overpaying for sports rights for its ESPN offerings.

Other firms like Jefferies took a similar tone, saying that the challenges ESPN faces are likely to offset the success of the film.

Not Everyone Is Negative

Despite worries about the company's cable business, there were some analysts who had a more upbeat view. Martin Pyykkonen from Rosenblatt Securities said he sees "Star Wars'" success moving Disney shares higher and that he expects the firm to outperform the S&P.

Latest Ratings for DIS

DateFirmActionFromTo
Jan 2017Goldman SachsUpgradesNeutralBuy
Jan 2017Pivotal ResearchDowngradesHoldSell
Jan 2017RBC CapitalUpgradesSector PerformOutperform

View More Analyst Ratings for DIS
View the Latest Analyst Ratings

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