) set a box office record with Toy Story 3, which became the
highest grossing animated movie ever. Apart from the movie's
cinematic success, higher 3D ticket prices also played a
significant role in generating box office revenue. Cars 2 is
currently scheduled for release next summer and could provide a
similar lift in revenue.
Disney Studios competes with companies like Warner Bros.
Pictures, owned by Time Warner (
), 20th Century Fox, owned by News Corp (
), and Paramount Pictures, owned by Viacom (
We estimate that Disney Studios represents 16% of the company's
stock value, and we attribute 4% of the company's value to box
Disney Box Office Market Share
We anticipate that Disney will gain
global box office market share
in 2010, and we expect these gains to continue with the summer 2011
release of Cars 2, the animated sequel to its 2006 blockbuster
Animated movies in 3D should continue to benefit Disney in the
future. We forecast Disney's global box office market share to grow
to 9% in 2011, and remain flat going forward. Should market share
increase to 10% by 2013, we estimate 2% upside to the company's
The chart above analyzes the impact of Disney's box office
market share on the company's intrinsic value.
Toy Story's Success a Roadmap
Toy Story 3 generated more than $150 million in ticket sales
during its opening weekend, 60% of which came from 3D theaters that
charged an average $3 more per ticket than normal movie
theaters. Overall, Toy Story 3 grossed over $1 billion in
global box office revenues becoming the 5th highest grossing movie
of all time. Below you can see how changes in global ticket prices
affect Disney's price estimate.
Disney is unlikely to repeat the success of Toy Story 3 with
Cars or other movies given that viewers waited 11 years for the new
Toy Story movie (vs. only 5 years for Cars), but it does provide an
How Valuable are Movies Like Cars to Disney?
We estimate that Disney's share of its movies' box office
revenues is about 60%. If a movie generates $400 to $500 million
worth of box office sales, Disney could well earn close to $240 to
$300 million of revenues each year.Supplemental value also comes
from sales of DVDs and merchandise related to successful
In the years ahead, animated movies like Cars 2 could become an
increasing source of value for Disney. Cars 2 in particular will
provide an interesting data point on what we could expect from
similar productions going forward.
You can see
the complete $37.44 Trefis price estimate for
Disney's stock here.