Star Wars – five stocks which may feel the power of the Force

15th December 2015

img

It may have an estimated mega-budget of some £200m but Star Wars: The Force Awakens, the latest film in the long running space saga looks set to be a major box office success.

With movie pundits predicting it will enjoy a global haul of more than $3bn, Hargreaves Lansdown Stockbrokers equity analyst Keith Bowman tips five stocks which he believes may benefit from the cinematic behemoth…

Walt Disney

Disney’s media empire spans TV networks, theme parks and resorts, TV and movie studios, consumer products and interactive media.

Previous Disney film hits such as Frozen grossed some $1.2 billion, while Marvel’s The Avengers grossed just over $1.5 billion. Avatar, distributed by rival 20th Century Fox, grossed $2.8 billion, the current record. Commentators have suggested that The Force Awakens could gross over $3 billion worldwide at the box office, no doubt boosting Disney earnings.

Disney’s fourth quarter 2015 results announced in early November saw revenues for its Consumer Products division rising by 11% to $1.2 billion. Management highlighted Star Wars merchandise as a driver of performance. The shares are listed overseas in the USA, with analyst consensus opinion currently pointing towards a buy.

Cineworld

Cineworld is a leading European cinema group with 1,999 screens across 216 sites in the UK and Ireland, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel.

In their last trading update, management highlighted that two forthcoming major releases Star Wars: The Force Awakens and Spectre, the latest Bond movie, were likely to be big draws at the box office. By the end of the year the Group will have over 2,000 screens. The shares are a constituent of the UK’s FTSE-250 index, with analyst consensus opinion currently signifying a buy.

Hasbro

Hasbro is a toy and game manufacturer, whose other interests include television programming and digital gaming. Back in 2007, Forbes estimated that Star Wars toys accounted for $9 billion of the franchise’s sales, billions more than the films themselves.

The group’s third quarter results announced back in October (2015), saw net underlying revenues rising by 9% with the Boys category up 24% to $593.1 million. The retail launch of Star Wars: The Force Awakens product, was a key driver of that growth along with strong contributions from NERF toys and Jurassic World products..  The shares are listed overseas in the USA, with analyst consensus opinion currently pointing towards a strong hold.

Regal Entertainment Group

Regal Entertainment Group (NYSE: RGC) operates the largest and most geographically diverse theatre circuit in the USA. As of late September (2015), it operated 7,357 screens in 571 theatres throughout 42 states. Regal operates theatres in 46 of the top 50 U.S. designated market areas.

At their Q3results, announced back in late October (2015), management noted that “With a number of highly anticipated releases scheduled for the upcoming holiday box office season, we remain optimistic about the potential for box office success for the remainder of 2015 and early 2016.” Again, the shares are listed on the US market, with analyst consensus opinion currently denoting a buy.

Microsoft

US computing giant owns the video games brand Xbox One. Star Wars game Battlefront is now being sold for use on Microsoft’s Xbox One console and is likely to prove a big Christmas seller. Microsoft’s first quarter results announced back in October (2015), saw membership for its online interactive gaming service jump by 28% to 39 million live monthly active users. The technology giant’s shares are listed on the US market, with analyst consensus opinion currently denoting a buy.

Leave a Reply

Your email address will not be published. Required fields are marked *