Why Marvel, Pixar and ‘Star Wars’ Will Ease Disney’s ‘Lone Ranger’ Pain
Given the disappointing performance of “The Lone Ranger,” Disney will be forced to write off the Jerry Bruckheimer Western as a loss. Some analysts are saying the writedown could be as high as $190 million, but just how much has yet to be determined.
But Disney isn’t shaking in its cowboy boots. Neither is Wall Street: Analysts and shareholders rallied around the Mouse House on Monday.
The stock was up over 84 cents or 1.3% during mid-day trading to $64.66, as Disney observers pointed to the success of Marvel’s “Iron Man 3,” (which earned $1.2 billion worldwide) and Pixar’s “Monsters University” (at around $401 million so far), as big hits for the studio that will help offset the bruises left at the box office by “Lone Ranger.” Disney ends is fiscal year in September.
And then there’s “Star Wars.”
Credit Suisse’s Michael Senno expects Disney to generate around $733 million in profits from the seventh “Star Wars,” out in summer 2015. Film is expected to generate around $1.2 billion in global theatrical receipts, and more from consumer products and other revenue, Senno said. As a result, Senno set a new target price of $74 for Disney’s stock to eventually reach, helping boost shares on Monday.
“The “Star Wars” franchise should drive strong profit growth and mitigate risk at the studio with fewer risky high budget films,” Senno said.
Before the July 4th weekend ended, Cohen & Co.’s Doug Creutz predicted “Lone Ranger” would cost Disney $100 million in a writedown. B. Riley’s David Miller agreed on the $100 million number, saying the film’s performance was a “massive disappointment.”
On Monday, after the film earned just $48.9 million over its first five days of release in North America, Lazard Capital’s Barton Crockett said the writeoff could be even steeper, at around $190 million, up from the $113 million he had originally expected. Credit Suisse’s Senno also chimed in, also predicting a $100 million loss.
Disney wrote off $200 million in 2011, when “John Carter” failed to find an audience in megaplexes. The film, which also carried a steep pricetag of around $200 million, went on to earn $283 million during its theatrical run.