Disney Gears Up for 'Cars'

Disney (DIS Quote) fans want a box-office joyride this weekend.

The Pixar-produced film Cars is scheduled to open in theaters Friday evening. The film is the first Pixar title released since the animation studio's May 5 acquisition by Burbank, Calif.-based Disney -- though Cars was on the assembly line long before Bob Iger and Steve Jobs agreed to their $6.4 billion merger.

The release of Cars is a watershed event because Disney's studio division, unlike the rest of the company, could use a little tune-up. Disney shares have risen 22% this year amid strong results at ABC, ESPN and the namesake theme parks. But Iger agreed to buy Pixar in large measure because he doubted Disney's own animation efforts.

So, Wall Street will be watching closely to see if Cars can keep up with the fast start that other Pixar films have has at the box office. It won't be easy.

Pixar's The Incredibles and Finding Nemo together have made just under $1.5 billion in worldwide box office alone. That eye-popping figure excludes the company's take from DVD sales, pay TV and so on. Now Wall Street is expecting Cars to at least match those films coming out of the gate.

"We project that Cars will exceed $70mm of US box office during its opening weekend," writes Soleil analyst Laura Martin, who rates the stock a buy. "By comparison, Pixar's previous two animated films, Finding Nemo and The Incredibles, had opening weekends of $70.3 million and $70.5 million, respectively. Our DIS estimates embed approximately $300 million at the US box office and $700 million worldwide for Cars."

Merrill's Jessica Reif Cohen writes, however, that expectations for the film are, potentially, too high. While Merrill expects the movie to hit $70 million in its opening weekend, Cohen currently estimates the film will make $270 million domestically and says there are "several factors that could make achieving a domestic box office above $250 million somewhat difficult." Merrill does business with Disney.