Few Walt Disney (DIS) observers saw its latest blockbuster coming.
But Doctor Strange is boosting the studio's revenues. The fantasy film is ruling the box office for the second week, outperforming animated musical Trolls from 21st Century Fox. As the movie holds its ground against new releases like Viacom-controlled Paramount's sci-fi film Arrival, Disney is making lots of money.
The success of Doctor Strange puts to rest concerns about superhero saturation, and is helping Disney smile amid the turbulence of ESPN subscriber losses. Disney is one of the best value plays around. The companies shares were roughly flat in late Tuesday trading.
The movie's success has meant that Disney, the shares of which have shot up by nearly 8% in the last month, has gotten a reprieve. Following a rare earnings miss, bears were ready to pounce on ESPN's double whammy of higher programming and production costs and lower revenues from affiliate fees and advertising. Subscriber woes have continued.
Doctor Strange beating expectations has raised the expectations from other Disney bets such as the upcoming releases Rogue One: A Star Wars Story and Moana. These could raise Disney's global ticket sales to well above $7 billion. That kind of revenue will make Disney a growth stock winner for the long haul.