Disney is re-releasing Avengers: Endgame with deleted scenes on June 28th in a move that should vault the superhero flick to first place in the all-time global box office rankings. Endgame is gunning for the crown currently held by Avatar, which, now that the Fox acquisition has been completed, Disney also owns.

In fact, Disney-owned films now account for 10 of the top 15 global box offices of all-time. The company has achieved a level of box office dominance that is unprecedented in the modern era. This dominance is bad news, not just for its fellow movie studios, but for all other content producers out there, especially Netflix (NFLX).

Get the best fundamental research

Not a Member Yet? You need a Gold Membership or higher to view the content on this page.
Start Your Gold Membership Today | New Constructs Member Login

Photo Credit: Netflix/Disney/Erik Kain

    3 replies to "Disney’s Avengers Spell Endgame for Netflix"

    • Stanislav Grom

      This article was published on June 26th when the Disney stock was 140$, yet on July 5th, with the stock 142$, the Disney stock got changed to Unattractive rating with a Sell recommendation by your own metrics. How should I reconcile these seemingly conflicting recommendations? Thanks.

    • Sam McBride

      Disney currently has a Suspended Rating in our system due to its acquisition of most of 21st Century Fox. What this means is that due to the impact of the acquisition, the company’s current financials are no longer a reliable indicator of the risk/reward of the stock. In particular, the company’s valuation metrics are distorted due to the fact that it has the additional debt/shares issued in the acquisition, but it has not yet gained any additional profits from the deal. For this reason, investors should not treat our current rating on Disney as definitive.

      This article, on the other hand, does integrate the impact of the Fox acquisition into its analysis of profits and valuation. The company’s track record gives us confidence that this acquisition will create long-term value for shareholders, and as the DCF scenarios at the end of this article show, DIS has significant potential upside still.

    • Stanislav Grom

      Thanks Sam, that helps.

Leave a Reply

Your email address will not be published.