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'Avengers: Endgame' is on track to generate more than $1 billion in profit for Disney

Theron Mohamed   

'Avengers: Endgame' is on track to generate more than $1 billion in profit for Disney
Stock Market2 min read

Avengers Endgame Disney

Disney

  • "Avengers: Endgame racked up more than $1.2 billion in global ticket sales in its opening weekend.
  • Captain America, Iron Man, and Thor's latest outing also broke more than 20 box-office records.
  • The movie could reach $3.15 billion in worldwide box office, according to Bank of America analyst Jessica Reif Ehrlich.
  • Her model suggests the movie could ultimately generat $1.06 billion in profit for Disney - around 44% of its profit in 2018.
  • Watch Disney trade live.

After a sensational opening weekend, "Avengers: Endgame" is on track to become one of the highest-grossing movies in history. The superhero film's success isn't only great news for Disney's stock - it could add a billion dollars to Disney's bottom line.

Captain America, Iron Man, and Thor's latest outing generated more than $1.2 billion in global ticket sales in its opening weekend, including $350 million at the domestic box office - nearly $100 million more than its prequel, "Avengers: Infinity War."

"Avengers: Endgame" broke more than 20 box-office records in its opening weekend, according to Box Office Mojo. It registered the highest average sales per theater with more than $75,000 across 4,662 theaters, and became the fastest movie to reach $350 million in domestic box-office revenue after hitting that amount in three days - half the time taken by "Star Wars: The Force Awakens."

If the movie builds on its strong start, it could ultimately generate $3.15 billion in theatrical revenue worldwide, according to Jessica Reif Ehrlich, an analyst at Bank of America.

"Endgame could be positioned to generate $2.7 to $3.5 billion in ultimate worldwide box office - potentially the largest film of all time should it surpass Avatar's 3D-driven $2.8 billion," she wrote in a research note.

Her financial model suggests the movie's box-office takings could translate into $945 million in profit for Disney after it gives its cinema partners their cut and subtracts advertising, distribution, and other costs.

Combined with $298 million from other revenue streams such as TV licensing and Blu-Ray sales, and after taxes and other payments, Disney's "Avengers: Endgame" profit could top $1.06 billion, according to her model. Disney earned $2.4 billion in after-tax profit in the year to September 2018, according to its latest earnings report.

In other words, Disney's eventual profit from a single movie could equal 44% of the total earnings from all of its movies, TV shows, musicals, cruises, theme parks, merchandise, toys, and video games last year.

Disney's stock climbed to a record high on Monday morning before giving up those gains later in the day. Bank of America has a price target of $168 for Disney's stock, representing 21% upside to the current share price.

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