Media giant Walt Disney Co DIS scored a box office hit with "Inside Out 2" showing a strong opening weekend and recently passing the $1 billion milestone.
An analyst highlights the company "bringing back box office magic."
The Disney Analyst: Bank of America analyst Jessica Reif Ehrlich has a Buy rating and a $145 price target on Disney.
The Analyst Takeaways: Disney's content slate shows signs of a turnaround since Bob Iger returned as CEO, Ehrlich said.
The analyst said Iger made two critical changes with a restructuring of divisions to put control back in the hands of creative executives and putting an emphasis on quality content over quantity.
"There are indications that the turnaround may have begun as ‘Inside Out 2’ surpassed $1bn at the global box office in its first 3 weeks," Ehrlich said.
The analyst said Disney is balancing originals and its strong IP.
"Excitement around upcoming titles including ‘Deadpool & Wolverine,’ ‘Moana 2’ and ‘Mufasa: The Lion King’ give us cautious optimism that DIS' studio will continue to improve."
Outside of the box office, the analyst sees Disney's Experiences segment as a "key long-term driver" for the company.
Read Also: Walt Disney Q2 Earnings: Profit Beat, Moderating Parks Growth, Password-Sharing Crackdown And More
The analyst said the Experiences segment generates steady profits, international park margins are improving, $60 billion in investments in the business shows confidence and cruises are growing faster than parks.
"DIS has a collection of best-in-class premier assets (in content/IP as well as Theme Parks)."
The analyst said the return of Iger "could significantly boost investor sentiment" with the company taking a new strategic direction.
Box Office Milestone: Disney's latest animated hit "Inside Out 2" became the first movie of 2024 to pass the $1 billion box office milestone worldwide.
In its first 19 days of release, the film grossed $469.3 million domestically and $1.02 billion worldwide, as reported by Variety.
The film is now one of only 11 animated films to hit the $1 billion milestone, with Disney having eight of the movies in this milestone group. "Inside Out 2" is the fastest animated film to hit the figure.
"Inside Out 2" was the first movie since 2023's hit "Barbie" to open with $100 million at the domestic box office.
The film's worldwide total already surpassed the original "Inside Out" film, which grossed $859 million in 2015.
For Disney, the $1 billion milestone can help with financials for the year, while also getting the company over breaking some long-running traditions in 2023.
Disney ranked second at the box office in 2023, trailing Comcast Corp CMCSA. This marked the first time since 2016 that Disney was not number one for the global box office by studio.
Disney also saw a streak of having at least one $1 billion grossing film globally each year end in 2023. The streak went back to 2014, when taking out the 2020 and 2021 COVID-19 pandemic-impacted years and included movies from hit franchises like Marvel and Star Wars.
The 2024 box office blockbuster lineup for Disney includes "Deadpool & Wolverine" on July 26, "Moana 2" on Nov. 27 and "Mufasa: The Lion King" on Dec. 20.
DIS Price Action: Disney shares are down 0.86% to $97.20 on Tuesday versus a 52-week trading range of $78.73 to $123.74. Disney stock is up 8% over the last year.
Photo: “Inside Out 2,” courtesy Disney
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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