'Star Wars: Episode IX' could follow 'Avengers: Endgame' in boosting Disney's stock

IMAX
  • The upcoming December release of “Star Wars Episode IX: The Rise of Skywalker” could drive Disney’s stock higher, according to BMO Capital Markets analyst Daniel Salmon.
  • Disney’s shares have soared 17% in the past month, helped by the record-breaking performance of “Avengers: Endgame,” which has racked up more than $US2 billion at the box office in two weeks.
  • Salmon raised his third-quarter forecasts for Disney’s studio revenue and operating income following the outperformance of “Avengers: Endgame.”
  • Watch Disney trade live.

The blockbuster performance of “Avengers: Endgame” has propelled Disney’s shares up 17% in the past month. The media giant’s stellar stock run could continue with the upcoming December release of “Star Wars Episode IX: The Rise of Skywalker,” according to one analyst.

The ninth and final instalment in the core Star Wars film saga won’t benefit from 21 preceding movies and being the second part of a story told over two films, as “Avengers: Endgame” did. But it’s still “the end of a multi-film story arc” that has “played out over 40+ years and created fans across generations,” wrote BMO Capital Markets analyst Daniel Salmon in a research note. He argues the move can “drive outsized box-office performance.”

“As such we see it as being of the ‘special’ variety, and if ‘The Rise of Skywalker’ can be as well reviewed and received by fans as ‘Endgame’ has been, it has the potential to produce similar upside,” Salmon added.

Captain America, Iron Man, and Thor’s latest outing broke more than 20 records in its opening weekend and has netted more than $US2 billion worldwide in its first two weeks,according to Box Office Mojo. Given the accompanying rise in Disney’s share price, Salmon admitted he was “pleasantly incorrect about Disney’s film slate not being a stock catalyst.” In a previous note, he said a strong showing from the superhero movie was expected, and that its stars’ share of the profits would eat into Disney’s return.

Salmon raised his third-quarter forecasts for Disney’s studio business to reflect the success of “Avengers: Endgame.” He hiked his revenue estimate by 5% to $US4.8 billion, and raised his prediction for operating income by 6% to $US1.1 billion.

Disney’s stock surged to an all-time high of about $US140 at the end of April. At $US135, it has climbed 24% this year.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.