Star Wars The Force Awakens: 5 shares that could benefit from the movie's release
Star Wars: The Force Awakens is expected to take a record-breaking $3 billion at the box office, with Odeon’s managing director Duncan Reynolds saying: “We expect it to become the biggest film of all time.”
So which companies are expected to do well from the hype around the film? Keith Bowman, analyst at Hargreaves Lansdown, has picked the stocks you may be looking for. But remember, if you’re thinking about investing, stocks are for the long term, and expectations of a short-term rally aren’t usually a good reason to get involved.
Indeed, investors could do well to remember the words of the sage of Dagobah, who took a long-term (800-year) approach: “Hmm! Adventure. Hmmpf! Excitement. A Jedi craves not these things.”
With those caveats in place, here’s Bowmnan’s fun look at the shares that might rise on the back of the movie’s release.
The Disney Empire covers TV networks, theme parks, films and toys and computer games. A steady flow of recent hits include Frozen ($1.2 billion) and The Avengers ($1.5 billion), while the company distributed Avatar – the biggest grossing film of all time.
Disney has already seen consumer product revenues rise 11% in the final quarter, to $1.2 billion, and the consensus opinion among analysts points towards buy.
Cineworld is one of the largest cinema groups in Europe, with 1,999 screens across 216 sites. Its latest trading update was positive, citing blockbuster sales for Spectre and the Force Awakens. The company is a FTSE 250 constituent, and the view from analysts is buy.
In 2007, Forbes estimated that Star Wars toys accounted for $9 billion of the franchise’s sales, many times more than the films themselves. That’s good news for the Guinness estate, as the original Obi Wan secured 2% of gross sales from anything Star Wars related in exchange for his performance. It’s probably the most lucrative film contract of all time, with revenues in the billions so far.
And it’s good news for Hasbro too. The company’s third quarter results saw underlying revenues rise 9%, thanks to rights for both Star Wars and Jurassic Park. The shares are US-listed, and analysts say hold.
Regal Entertainment Group
Regal Entertainment Group is the largest cinema network in the US. It’s in 42 states, and has 7,357 screens in 571 theatres. Its third quarter results, published in October, looked forward to “a number of highly anticipated releases scheduled for the upcoming holiday box office season”, and the company is optimistic about short-term revenues, well into 2016. Analysts collectively say ‘buy’.
Microsoft could be the biggest winner from Star Wars games this Christmas, says Hargreaves. Some 39 million people subscribe to the Xbox online service, up 28%. The company is US listed, with analyst consensus opinion pointing towards buy.
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