Disney (DIS) Stock Climbs on Early Success of 'Age of Ultron' Summer Blockbuster

NEW YORK (TheStreet) -- Disney (DIS) shares are up 0.83% to $109.62 in afternoon trading on Friday, the session after the company's highly anticipated 'Avengers 2: Age of Ultron' movie dominated the Thursday night box office to the tune of $27.3 million, placing it sixth all time for Thursday night preview debuts.

The film is the sequel to the highly successful 'Marvel's the Avengers', which brought in over $1.5 billion at the worldwide box office, and is expected to be one of the biggest films of the summer movie season. The original 'Avengers' film, released in 2012, holds the record for the largest opening weekend ever with $207.4 million brought in following its release.

The $27.3 million first night take for the new 'Avengers' film projects to full weekend receipts between $230 million and $306 million, according Forbes

Marvel Studios, which Disney bought for $4 billion in 2009, holds three of the top 10 all time biggest opening weekend slots, according to Box Office Mojo. The Avengers and Iron Man 3 hold the top two all time opening weekend grossing spots respectively with 2004's Spider Man 3 coming in at number eight with an opening weekend take of over $151 million.

Ticket sales for the movie industry this year are expected to rise 6% to more $11 billion, which would set a record.

TheStreet Ratings team rates DISNEY (WALT) CO as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate DISNEY (WALT) CO (DIS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • DIS's revenue growth has slightly outpaced the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 8.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • DISNEY (WALT) CO has improved earnings per share by 23.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DISNEY (WALT) CO increased its bottom line by earning $4.25 versus $3.38 in the prior year. This year, the market expects an improvement in earnings ($4.90 versus $4.25).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Media industry average. The net income increased by 18.6% when compared to the same quarter one year prior, going from $1,840.00 million to $2,182.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, DISNEY (WALT) CO's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 53.05% to $1,855.00 million when compared to the same quarter last year. In addition, DISNEY (WALT) CO has also modestly surpassed the industry average cash flow growth rate of 49.26%.
  • You can view the full analysis from the report here: DIS Ratings Report
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