A Los Angeles analyst’s bullish projection on Disney’s 2001 operating income apparently bolstered Mouse House shares, even as the market in general, and studio stocks in particular, got beaten up Wednesday.
Gerard Klauer Mattison’s Jeffrey Logsdon now believes Disney will ring up a half-billion dollars in studio-entertainment operating income during its current fiscal year — as much as twice some previous analyst estimates — thanks to soaring DVD sales and anticipated boffo box office for upcoming film releases.
Logsdon’s bullish projections were prominently touted on the CNBC cable network and Bloomberg financial wire.
“Pearl Harbor,” set for a May 25 wide release, “is a movie that can significantly exceed $500 million in worldwide box office,” Logsdon said.
That could rank the Jerry Bruckheimer-produced pic — a costly undertaking budgeted at a reported $135 million — among the dozen highest-grossing movies ever. Exhibs expect the World War II drama to figure among the summer’s biggest releases, but many observers say it’s too soon to predict if the pic will see blockbuster success.
“Atlantis,” an animated feature set for June release, also looks like a hit, Logsdon said. He noted estimates put the pic’s production cost at just over $75 million, well under the budget for many Mouse House animated features.
As for DVD, “We feel like sales in that arena are tracking far ahead of previous conventional wisdom, and Disney will get a lot of leverage out of that,” the analyst said.
Logsdon said Disney’s theme parks and resorts unit also will be key drivers of future operating income.
“Disney is one of the best-positioned global brand franchises in the entertainment industry,” Logsdon wrote in his investors report. “We believe it … should attract considerable investor attention over the next two years, as new theme park capacity should come on line, its free cash flow generation likely accelerates and results at the filmed entertainment division improve.”
In issuing Logsdon’s report, Gerard Klauer reiterated a “buy” on Disney shares. The firm has a 12-month price target on the stock of $45.
Disney shares, like most media/entertainment stocks, have taken a beating on Wall Street of late over concerns about a soft ad market. But Disney shares climbed 47¢, or almost 2%, to $27.38 Wednesday.
Viacom’s most widely tracked Class B shares dropped 7% to $41.70, while AOL Time Warner and News Corp. were off about 2% each at $37.84 and $31.55, respectively.
The Dow Jones Industrial Average shed 233.76, or 2.4%, to stand at 9,487.00.