I've been watching Disney (DIS) on the sidelines for a while now, and despite it's huge increase in stock price the last two months, the stock still seems like an exciting and promising investment. Priced at $64 as of this writing, the stock may slide a little in the short term, but long investors should not fear. We need to buy before the following catalysts fully surface.
Marvel Movie Bonanza
When Disney first purchased Marvel, I should have bought this stock. As an avid comic book reader in my early years, I love the idea that financially turbulent Marvel finally has a safe and secure home. Not only will Disney continue to greatly benefit from Avengers, Iron Man and Thor movies, but eventually blockbuster titles like Spider-Man, X-Men and other supers will return home. Marvel also owns a huge amount of other major untapped characters giving Disney an endless stream of opportunities for movie and television making.
Lucasfilms Will Kick Butt
Disney owning the Star Wars franchise is still unrealized and in the works as director JJ Abrams has already been attained to direct and reboot the franchise, which shouldn't be difficult since the last trilogy was such a disaster. The science fiction crowd will undoubtedly embrace the new films and when Disney "Marvelizes" the franchise by also filming individual character movies, Star Wars will reach it's former glory.
In Disney's 2012 annual report, they outline just how much they intend to utilize the newly purchased science fiction franchise.
Each of our strategic acquisitions has generated tremendous new opportunities and creative potential across our entire company, and we are thrilled to add Lucasfilm and its beloved Star Wars franchise, with its universe of more than 17,000 characters, inhabiting several thousand planets, spanning 20,000 years. Star Wars offers infinite inspiration and opportunities, and we're already moving forward on a new feature film to continue the epic saga. Star Wars Episode 7 will be in theaters in 2015, with more feature films planned - along with television programming, games and merchandise, and an expanded Star Wars presence in our parks around the world.
The combination of Marvel and Star Wars will give Disney incredible box office revenue.
Pixar Will Rule Again
At D23, Disney and Pixar introduced future movies including a Finding Nemo sequel, Finding Dory. Ellen Degeneres had already announced this via her show, but many new intriguing concepts were also introduced. Clearly Disney Animation and Pixar are remaining creative and aggressive.
Pixar's upcoming The Good Dinosaur sounds especially interesting and could be Pixar's next merchandising sensation. The movie's premise entails "What if that asteroid missed earth?" and follows Arlo the Apatosaurus who befriends Spot the human.
Mobile Opportunities Emerge
This space is growing incredibly fast, and Disney does not inform us how much of interactive income stems from mobile users in it's quarterly financials. I do not see much discussion on other articles about Disney's unique opportunities in the mobile arena. This space will likely grow exponentially the next few years for Disney. Disney, like Nickelodeon, has sweet opportunities to rake in cash from these sources.
In the 2012 Annual Report we see evidence of Disney's aggressiveness towards portable devices not only by looking at the hundreds of gaming apps for smartphones and tablets that they offer, but also through classic consoles.
And 2013 promises to be even more exciting as we reinvent the way video games tell stories with the highly anticipated launch of Disney Infinity, an extraordinary new gaming platform that lets people play with all of the Disney properties any time, any place, across devices to create their own unique gaming adventures.
More proof of major integration of mobile experiences.
The revolutionary WatchESPN service now allows fans in more than 46 million U.S. homes to watch ESPN online, on-the-go from their tablets and mobile devices, and through Xbox.
Disney "gets it" and their interactive revenue will grow tremendously.
Disney parks are money magnet giants and this last quarter park revenue grew by 7% to $3.7 billion. I expect this trend to continue unless the company absorbs costs of branching out and developing a Star Wars Park or something of that nature. How cool would that be? Answer: Very cool.
I specifically appreciate that Disney is still innovating inside its parks as seen with Cars Land at Disney California Adventures.
Media revenues are spiked 5% up to $5.35 billion. ESPN and Domestic Disney channels performed well offsetting softness at ABC family.
But don't take my word it.
Will Disney keep growing even at these stock price levels?
Without the aforementioned speculations, E-Trade has predicted the stock to increase 15% on a year-to-year basis. Goldman Sachs has a conservative $69 price target on the stock which seems low since the stock recently popped to $68. Janney Montgomerey Scott targets the price at $71 and Sanford C. Bernstein increased the price to $76. Deutche Bank holds its target at $75. This stock seems to be a strong growth play and will likely reward investors at any entrance level at this point or lower.
Sure, the stock price levels are a little high but has decreased slightly the last few days. As a long investor, there is not much to worry about when investing with Disney.