With a chairman like Alan Horn, Walt Disney Co. (DIS) is moving towards a very bright future. Horn is an industry veteran who is not afraid to get his hands dirty and is already unanimously respected by the company’s management. Prior to his current position, Horn was president of Warner Bros. from 1999-2011.
Horn isn’t afraid to take risks and this could be a difference maker in years to come. Shortly after becoming chairman, Horn spent an extra $15 million to make changes on “Oz: The Great and Powerful”, which already had a budget around $200 billion. Oz beat box office projections bringing in $80 million domestically and $69.9 million abroad on its opening weekend.
It’s content like OZ and films coming from studios under the Disney umbrella such as Marvel, Pixar Animation, and Lucasfilm that help fuel growth. Strong film content is a driving force for the various parts of Walt Disney, with blockbusters helping fuel new rides at theme parks, TV shows, and video games. With this in mind, Horn is trying to push ahead with plans to release more live action movies such as “Tomorrowland” and a new “Pirates of the Caribbean”.
Another big winner for Disney will be recently acquired Lucasfilm, which owns the Star Wars franchise. The Star Wars franchise has generated $27 billion through box office, DVD, video game, book and toy sales over its lifetime. Starting in 2015, Horn hopes to tap into this cash machine by releasing a new Star Wars sequel or spin off every year.
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Walt Disney Co. should continue to be a big winner over the next few years with such a strong leader at the helm and new blockbuster content coming down the pipeline. Analysts have projected Disney’s revenue growth to be 6.6% for both 2013 and 2014 with operating margins expanding as well. EPS is also estimated to grow from 3.13 to 3.92 by 2014. Although Disney is trading at an all time high, there is plenty of potential to keep trending higher if it can continue to grow and improve its portfolio of content.
Walt Disney Co. (DIS): Disney's P/E ratio, 18.2%, is above the industry average 12.6x, but earnings for Q2 are estimated to be $.76, which is $.21 higher than last years Q2 earnings.
Nick Sousa, Kapitall