Credit: Shutterstock photoThe silver screen has seen a resurgence this year, as movie-goers are flocking to theaters left and right, watching movies like American Sniper, Avengers: Age of Ultron, Jurassic World and others in droves.
As dollars flow to the box office in 2015 ($4.3 billion so far, according to Box Office Mojo), it may be time to put some of those dollars to work in your portfolio.
MKM Partners analyst Eric Handler notes the upcoming box office weekend is poised to continue the trend of the first six months of the year. "Led by strong new release Ted 2 and strong carryover from Jurassic World and Inside Out, the box office, for the first time ever, could find itself with three films grossing at least $50 [million]," Handler writes in a research report. "The "big three" films should allow the box office to overcome the difficult comparisons with last year's same weekend when Transformers: Age of Extinction garnered $100 [million] in its opening weekend."
In order to take advantage of these trends, Handler has buy ratings on companies like movie-theater chain Cinemark (CNK), IMAX (IMAX) and Time Warner (TWC).
Ted 2 (distributed by Universal and owned by Comcast (CMCSA)), looks to be the big winner this weekend, with Handler estimating a $56 million opening weekend. In 2012, the first film, starring Mark Wahlberg, Mila Kunis and Seth MacFarlane (who also directed), took in $549.4 million on a budget of $51 million. The sequel hopes to duplicate and surpass that figure, thanks to the star power of Wahlberg and MacFarlane.
Star Wars ()Jurassic World, also distributed by Universal, is poised to slip to second place with a $54 million box office. Thanks in part to nostalgia and strong reviews, Jurassic World has generated more than $1 billion at the global box office since it was released almost three weeks ago. Over the past month, shares of Comcast have drastically outperformed the market, gaining 5.2%, compared to a 1.1% decline in the S&P 500.
Inside Out, from Disney's (DIS) Pixar, is expected to take third place, while Max, from Time Warner's Warner Bros., is expected to come in fourth with an $11 million box office.
Thanks in part to movies like Avengers, San Andreas, Jurassic World and several others, the second-quarter box office has been stronger-than-expected over the past couple of weeks, up 9.2% year-over-year, Handler notes.
The trend is expected to continue in the third-quarter, with Handler expecting up 7%, versus a contraction in the third quarter of 2014. "Movies like Minions, Spectre (James Bond), The Hunger Games: Mockingjay Part 2 and Star Wars: The Force Awakens slated for release in the back half of the year, the health of the box office looks quite good."
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
