A safe ‘Harbor’

Disney stock up on tentpole's prospects

Wall Streeters bought into the “Pearl Harbor” hoopla Monday, even as Disney’s head mouseketeer effectively warned against irrational exuberance over the looming release of the World War II actioner.

Trading in Mouse House shares was almost twice the normal volume and the shares closed up $1.68, or 5%, at $34.28 on bullish prospects for the Memorial Day weekend release of “Pearl Harbor” and a related analyst upgrade.

Salomon Smith Barney’s Jill Krutick was among a handful of analysts boosting Disney share-price forecasts, and Krutick also upgraded her rating of the stock to “buy” from a previous “outperform.”

Meanwhile, Disney chairman and CEO Michael Eisner was quoted on business-news web CNBC as saying the Mouse House was too big and too diversified a conglom for its fortunes to be swayed by the success or failure of a single movie release. Eisner has repeatedly struck a ho-hum attitude when mentioning prospects for “Pearl Harbor,” even though observers tout the prospect of a $100 million opening for the film after exhibs raved over initial pic screenings.

It’s believed production costs on the tentpole pic — helmed by action-genre maven Michael Bay and produced by hitmeister Jerry Bruckheimer — reached at least $140 million. The figure looms especially large in light of recent Mouse House pronouncements stressing lower budgets on individual pics and few movie releases in general.

But whether or not Eisner can easily warm to the subject, hype over “Harbor” seems to have reached phenom crescendo. Consider the following:

  • Internet wagering site Intertops.com was offering bets on box office prospects for the pic, figuring “Pearl Harbor” a 5 to 6 favorite to eclipse the record $90.2 million bow of 1997’s “The Lost World: Jurassic Park.” (Wagers can also be placed on whether “Pearl Harbor” will earn over or under $285 million domestically; “Lost World” grossed a total $229.1 million in North America).

  • Disney reportedly spent more than $5 million — and borrowed a nuclear-powered aircraft carrier to boot — in staging a Hawaiian “Pearl Harbor” premiere and party whose 2,000 invited guests included Navy brass, Beltway pols and Hollywood execs.

  • Salomon’s Krutick wrote in her research report that income from “Pearl Harbor” alone could add anywhere from 2¢ to 25¢ to Disney’s earnings over the next two years.

    The analyst further detailed a potentially positive “psychological impact” from the film for Disney, which has been in turnaround mode for the past several quarters due to problems ranging from ill-advised Internet spending to stagnant consumer-product operations.

    “While films often do not move stocks, the gloom that has settled upon Disney could lift, allowing Disney’s stock to catch up to its peers,” Krutick wrote.

Monday helped the stock to roughly a midpoint between its 52-week highs and lows. Disney shares closed at $42.50 last Aug. 3, then sank as low as $26.44 on Dec. 22.

(Jill Goldsmith in New York contributed to this article.)

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