NEW YORK (TheStreet) -- In anticipation of the theatrical release of "The Force Awakens" on December 18, Disney (DIS) - Get Report will release new Star Wars merchandise in its own retail stores and website, and via a number of retail partners, at midnight tonight, dubbing the launch "Force Friday." A number of Wall Street analysts have weighed in recently on the potential benefit that Disney, and partners such as toymaker Hasbro (HAS) - Get Report, may see from the much-anticipated film and the associated merchandise.
THE FORCE IS STRONG: JPMorgan analyst Alexia Quadrani believes the launch of new Star Wars merchandise ahead of the first film in the sci-fi franchise in a decade has the potential to "meaningfully accelerate" Disney's Consumer Products division's revenue and profit growth. A 200% increase in Star Wars global licensing and retail store sales could lead to $500M of incremental revenues and $200M of incremental operating profit in FY16, estimated Quadrani, who has an Overweight rating on Disney. Meanwhile, CLSA analyst Vasily Karasyov initiated coverage of Disney with an Outperform rating in a note to investors September 1, stating that the company's fiscal 2016 and fiscal 2017 profits should surpass expectations driven by its film studio and consumer products licensing businesses. Karasyov set a $114 price target on Disney shares.
TOYS: Piper Jaffray analyst Stephanie Wissink expects upwards of $3B of Star Wars merchandise sales in 2015, with roughly $500M of that coming from toy sales. Noting the movie will be released a week before Christmas, Wissink said 2016 is likely to benefit as well and could be even larger. The analyst upgraded Hasbro, the master toy licensee for Star Wars products, to Overweight, saying the recent pullback in shares has provided an attractive entry point, but she believes Mattel (MAT), which holds a license for vehicles, JAKKS Pacific (JAKK) - Get Report, with its action figures, and Build-A-Bear (BBW) - Get Report should all see a lift from related sales as well.
RETAILERS: Wissink noted that e-commerce and specialty sales account for over 50% of toy industry sales, noting she believes Amazon (AMZN) - Get Report will set the online precedent with the launch of its Star Wars online store. The analyst also pointed out that Wal-Mart (WMT) - Get Report is the toy industry's largest seller and estimated that Target (TGT) - Get Report is about 12 to 15% of total U.S. toy sales.
PRICE ACTION: Disney shares, which are down about 15% in the last month, are up 46c, or 0.5%, to $102.39 in pre-market trading. Hasbro, which has pulled back by about 5% over the last month, is up 2% to about $76 per share in advance of the market's open.
Reporting by Jason Keil.
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