Could "Toy Story 5" Reignite Disney?

Source The Motley Fool

Key Points

  • Disney's stock is down more than 40% in the past five years.

  • "Toy Story 5" could gross more than $200 million in its opening weekend and boost licensing and merchandise sales.

  • 10 stocks we like better than Walt Disney ›

The famed sheriff and his space ranger sidekick are back again with the weight of The Walt Disney Company (NYSE: DIS) on their animated shoulders. Toy Story 5 opens in theaters on Friday, June 19, and it won't be just another Pixar movie for the entertainment conglomerate. This time around, the 31-year-old franchise will see if it can move the needle for a company in need of a win.

The early signs look good. The film should gross more than $200 million in its opening weekend. Yet, it's not just the movie depicting toys versus tech that could propel Disney. The Toy Story franchise is a serious business across Disney's entire business model. The film will provide momentum for Disney's licensing and merchandise, as well as a renewed reason to visit the theme parks. All told, a successful release would translate into billions in revenue for Disney.

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The Walt Disney Company logo on a dark blue backdrop.

Image source: The Motley Fool.

The company could use the positive news. The box office has been volatile for several years. A change in executive leadership and several legal and regulatory battles have dominated Disney's headlines, so a strong summer on the back of a blockbuster film could be the spark the stock needs. No, one movie won't solve all of Disney's issues, but positive headlines and renewed interest in the brand are a start.

As of June 17, Disney's stock has fallen more than 11% in 52 weeks. It has shed 42% over the past five years. As the original fans of this classic franchise introduce a new generation to the characters this weekend, Disney investors should hope Toy Story 5 is the fresh start the newly appointed CEO, Josh D'Amaro, needs. I think this film brings enough star power and fan loyalty to make it work.

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Catie Hogan has positions in Walt Disney. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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