Disney Stock Rises on Enthusiasm for 'Star Wars'

Courtesy of Lucasfilm
'Star Wars: The Force Awakens'

Goldman Sachs now expects 'Force Awakens' to earn $750 million domestically.

Shares of Disney rose 2.6 percent on Tuesday after analysts at Goldman Sachs increased their box-office projections for Star Wars: The Force Awakens.

The firm told clients in a research note that it now expects Force Awakens to earn $750 million domestically, up from its previous estimate of $500 million — which was well below many other predictions both on Wall Street and elsewhere.

Goldman Sachs upped its international expectations to $1.2 billion, whereas it previously predicted $1 billion.

If accurate, Force Awakens would become the third-biggest movie of all time, after Titanic and Avatar. Though when adjusted for inflation, Force Awakens would need to exceed $1.5 billion to pass the original Star Wars from 1977 and would need $1.7 billion to pass 1939's Gone With the Wind, which is the top movie of all time when inflation is considered.

The Goldman Sachs analysts figure that Force Awakens will make 1.6 times what Jurassic World made domestically over the summer.

While Avatar made 80 percent of its domestic haul via the sale of tickets to 3D showings, the analysts think only 50 percent of the Force Awakens box office will come via that route.

Based on its more bullish assessment of Force Awakens, Goldman Sachs increased its earnings-per-share estimates for Disney for the next three years, on average by 3 percent annually.

The Wall Street firm also predicts $6 billion in merchandise sales related to the Star Wars franchise in the fiscal year, which is about on par with the amount of merchandise sold for Frozen in the previous fiscal year.

Shares of Walt Disney were up $2.81 to $112.16 on Tuesday. The stock, though, is still off 7 percent since August, when investors learned of pressure on ESPN and other cable channels.

Email: Paul.Bond@thr.com