Disney Stock Prediction: Strong Box Office Performance Is A Tailwind For Disney

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First

DIS Stock Prediction


  • In spite of a hacker threat that Disney’s latest Pirates of the Caribbean film was stolen and was held for ransom, the movie is topping U.S. and international box office charts.
  • Pirates of the Caribbean: Dead Men Tell No Tales’ four-day U.S. gross sales is $77 million. The global release also took in $208.4 million.
  • Movies are not Disney’s major revenue generators, but their success or failure usually influences the stock more than the Parks & Recreation division.
  • The Studio & Entertainment segment, which covers movies, delivered 28.17% growth last year. It was the best performing division of Division.
  • DIS has positive market trend algorithmic forecasts. They are signaling a buy for Disney’s stock.

Disney (DIS) Chief Bob Iger confirmed that they received a threat from a hacker who allegedly stole the latest Pirates of the Caribbean movie. However, Disney refused to submit to the extortion attempt of the hacker. The whole thing came out as a hoax.  Disney spent $230 million producing Pirates of the Caribbean: Dead Men Tell No Tales. It is therefore a great relief that the hacker threat was just a bluff that Iger wisely ignored.

Dead Men Tell No Tales’ success in the box office tells me there really is no hacked copy of it circulating online. This movie’s 4-day ticket sales in the U.S. has reached $77 million. As of May 28, foreign ticket sales also hit $208 million. Dead Men Tell No Tales is definitely a hit movie.

Disney Stock Prediction

(Source: Box Office Mojo).

Monday was Memorial Day so U.S. markets are closed. However, the box office success of Dead Men Tell No Tales will likely help DIS recover from its -6.22% 30-day performance. In my observation, Disney’s stock always get favorable sentiments from investors whenever it has a hit movie.

(Source: Google Finance)

Why Hit Movies Are Important To Disney

Making movies is just a small part of Disney’s overall business. But  if we look at the chart below, hit  movies last helped Disney’s Studio & Entertainment division post the best Year-to-Year growth. Disney’s TV division (Media Networks) and Parks & Recreation division are stagnating. Studio & Entertainment posted a Y-o-Y growth of 28.17%, while Media Networks only achieved 1.83% Y-o-Y growth.

(Source: Investopedia)

Studio & Entertainment’s impressive performance last year was because Disney had 6 of the 10 top-grossing movies in 2016. Compared to other film outfits, Disney released fewer movies last and yet still achieved the most amount of global revenue from cinema ticket sales, $7.61 billion.

Please study the chart below. Investors who like the movie  industry should really add DIS to their long-term portfolios. The Mickey Mouse empire knows how to make hit movies, not just cartoon films.

(Source: The Hollywood Reporter)

Disney owned the four top-grossing movies last year. Dead Men Tell No Tales can help Disney replicate this feat. As of today, Disney only got two films among this year’s top grossing movies, Beauty and the Beast (no.1) and Guardians of the Galaxy Vol. 2 (no. 3). Dead Men Tell No Tales is currently at no.13. It  might just become a top 6 film.

(Source: Box Office Mojo)

It my fearless forecast that without achieving 5 or 6 of the top 10 grossing films of the year, Disney’s Studio & Entertainment division will not deliver a double-digit growth this year. Disney still supposedly still has nine movies left scheduled for release this year.

I am very confident that the upcoming 2017 release of Star Wars: The Last Jedi, Thor: Ragnagrok, Cars 3, Cruella, and High School Musical 4 will help Disney. The Cars 3, Star Wars, and Thor movies are each likely to generate ticket sales of more than $1 billion.


I like it that Disney never buckled down from the threat of an extortionist hacker. Iger called his/her bluff and won. I therefore rate DIS as a strong buy. The management team of this company knows how to make hit movies and they know how to deal with criminals.

Long-term investors who like dividend paying companies should add DIS to their portfolios. Disney touts a very strong history paying dividends. The Mickey Mouse empire is not stingy when it comes to returning money to their shareholders.

(Source: Vuru.co)

The positive 3-month and one-year market trend algorithmic forecasts from I Know First also fortify my go-long recommendation for DIS. The gods of probability favor Disney’s stock price being higher after 12 months.

The bullish algorithmic forecasts for Disney from I Know First is in line with the analysis of technical indicators and moving averages.

(Source: Investing.com)

I Know First Algorithm Heatmap Explanation

The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short position), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.

Predictability is the actual fitness function being optimized every day, and can be simplified explained as the correlation based quality measure of the signal. This is a unique indicator of the I Know First algorithm. This allows users to separate and focus on the most predictable assets according to the algorithm. Ranging between -1 and 1, one should focus on predictability levels significantly above 0 in order to fill confident about/trust the signal.

Past I Know First Success With DIS

I Know First has been maintaining its bullish forecast of Disney, such as its bullish article published on October 2, 2016. Fortunately, Disney did not decide to purchase Twitter in what would be a $20 to $30 billion merger. Such a merger would cause Disney to borrow heavily to purchase a company struggling to make a profit. Since the article’s release, not only has Disney released number one box office films, the stock has increased 16.75%.

(Source: Google Finance)

This bullish forecast for DIS was sent to I Know First subscribers on September 29, 2016. To subscribe today click here.