Summer Movie Round-Up: What Studios Will See Their Stock Soar?

Daniel Banas |

When you were a kid, you probably looked forward to summer as the time when all the biggest, most ridiculous summer blockbusters filled the local cinema. Nowadays, you can enjoy the dumb fun of the summer movie season in a more tangible way: by investing in the companies that will be raking in the biggest profits once the tykes are back at school. So, let’s take a look at what the biggest studios have in store to keep filmgoers entertained and stockholders flush this summer.

Buena Vista (Walt Disney Co) (DIS)

Disney has always been always been a beast, but these days it's more of an unstoppable juggernaut than, well, their subsidiary Marvel’s character “The Juggernaut.” That said, Disney’s stock is also sitting near all-time highs after the successes of Frozen and the mammoth Marvel movie machine.

Avengers: Age of Ultron has already performed about as well as expected, putting the studio's stock price in a safe place, but, unfortunately, the rest of the summer might not be quite so impressive...at least by Disney standards. Memorial Day weekend sees the release of the mysterious Tomorrowland, featuring George Clooney and lots of neat-looking futuristic design.

Though the movie's enigmatic nature has grabbed our attention, it can make investors understandably nervous in an age when studios frequently give away any and all plot points if it means getting butts in seats. 

A new Pixar film is always good news for Disney investors, and this year is likely no different. June's Inside Out features a fun premise, a lovable voice cast (Amy Poehler, Bill Hader, Mindy Kaling), and a solid release date.

That said, it's also an original property, so unlike Toy Story, Monster's Inc. or even Cars, it's not a sure thing. 

Similarly, July sees the release of another Marvel film, which history tells us is a guaranteed win. Unfortunately, this isn't Iron Man, Captain America, or even Thor...it's Ant-Man. A man with the power of...an ant.

To make matters worse, the film experienced a notoriously troubled (read expensive) production, making it a bit of an uphill climb toward profitability

End of Summer Stock Prediction: Mixed (after Avengers is accounted for)

Warner Bros. (Time Warner Inc.) (TWX)

Warner Brothers is the home of Batman, Superman, and... Entourage. Unfortunately for them, only the Entourage boys will be on screen this summer, but that doesn't necessarily mean Warner Bros. has nothing to offer.

They've got several films this season that look like modest hits. Mad Max: Fury Road has a lot of action fans salivating, while Entourage has a proven fan-base, and The Rock, whose earthquake action flick San Andreas opens in late May, is more popular than ever.

Same goes for Channing Tatum's abs, which will should bring in a lot of admirers for Magic Mike XXL in early July. The Vacation sequel/reboot has Ed Helms, a much-loved franchise and a plum late-July release date in its favor, while The Man from U.N.C.L.E. will likely benefit from a fairly uncompetitive mid-August release.

Add in subsidiary New Line's on-the-cheap horror flick The Gallows and Time Warner will likely be sitting pretty once the kiddies start heading back to school.

End of Summer Stock Prediction: Up

NBCUniversal (Comcast Corporation) (CMCSA)

May brings Pitch Perfect 2, which should perform perfectly fine thanks to goodwill left over from the original sleeper hit. Then come the big guns: Jurassic World has Chris Pratt, dinosaurs, and a brand that offers a nice change of pace from comic book blockbuster hysteria. 

Ted 2 promises more of the same, which is precisely what most Seth MacFarlane fans want to see. Next up is Minions, which finally gives those weird and wildly popular yellow critters from Despicable Me their own starring vehicle, and Trainwreck, featuring the powerhouse combo of Amy Schumer and Judd Apatow. Then, August brings Straight Outta Compton, which no doubt has an underserved audience that's hungry for cinema that celebrates hip-hop and rap culture.

In short, look for Universal's film division to be flush with cash by summer's end.

End of Summer Stock Prediction: Up

Paramount Pictures (Viacom, Inc.) ($VIA.B)

Viacom stock has had a rough year, and if they're looking for Paramount Pictures to save the summer...well, they might want to keep looking. The studio has nothing to offer in May or June, and the closer we get to their big gun in July, Terminator: Genisys, the more it looks less like the muscular Schwarzenegger circa 1984, and more like the flabby, over-the-hill Schwarzenegger of 2015.

The last two Terminator films underperformed, and while this one could surprise us, it's by no means a safe bet. 

More promising is Mission Impossible: Rogue Nation. The fourth entry in Tom Cruise's frothy spy series was a big global performer and very well-liked to boot, and the next one has the movie star we love to hate to love (to hate?) hanging outside of an Airbus A400 M...just the sort of mindless entertainment one looks for to pass the time in the dog days of summer.

End of Summer Stock Prediction: Mixed 

Sony Pictures Entertainment (Sony Corp) (SNE)

Hard to believe, but Sony has actually had a decent year since Amy Pascal's troubled regime left the reins to Tom Rothman after last winter's Seth Rogen/NorthKorea-gate. The stock has been rising, and, despite a lack of any superhero fare (the studio is taking a Spider-break after last year's much-reviled The Amazing Spider-man 2), Sony actually has some strong dark horse counterprogramming for audiences who may be tired of watching jacked guys in leather masks pretend to be cartoon characters. 

This June sees Aloha, the latest comic romance from Cameron Crowe.

While the Jerry Maguire filmmaker has a spotty track record at the box office in recent years, the lack of adult romance offerings at the box-office (meaning grown-up romance, not "50 shades" titillation) combined with an attractive cast consisting of Bradley Cooper, Rachel McAdams, Emma Stone and Bill Murray might make this a profitable little film. On the other hand, the leaked emails from Kim Jong J Franco-gate revealed that former studio chief Pascal loathed the film and had little hope for its success.

July looks far more promising, though, as the studio's Adam Sandler vehicle Pixels is released. Adam Sandler is certainly not the sure thing he once was, but this trailer has garnered a lot of interest:

The mix of Sandler and a cast featuring Peter Dinklage (Tyrion!), Josh Gad (Olaf!) and Kevin James (er...Paul Blart?), director Chris Columbus (Harry Potter and the Sorceror's Stone) and vintage arcade video games like Pac-Man and Space Invaders is appealing to a very broad audience. Wreck-It Ralph mined the video game nostalgia market to the tune of $471 million worldwide in 2012, and there's no reason to assume Pixels couldn't end up with a similar cume come Labor Day.

Sony also has the August release Ricki and the Flash, a comedy starring Meryl Streep as an aging rocker looking to reconnect with her family. There's a significant market for Meryl Streep and relationship comedy. Add in the music element, and you've got a nice little late-summer hit. 

End of Summer Stock Prediction: Up

21st Century Fox  (FOX)

Rupert Murdoch's empire had a huge 2014, claiming $1.79 billion and a 17.3% market share, but this year looks to be a bit more muted. Poltergeist could do well on what's likely a fairly modest budget, but fierce competition from Avengers, Mad Max and Tomorrowland might make it difficult for the horror remake to break out.

Melissa McCarthy's Spy should also be a solid earner. As she proved last year with Tammy, her fans will come out to see her even in lackluster films, and early word on Spy is that it's actually quite a lot of fun.

Me and Earl and the Dying Girl and Paper Towns could both break out in a big way ala last years' The Fault in Our Stars, but probably not enough to move the stock to any notable degree.

Then there's Fantastic Four.

Early word is that it's a train wreck that would make Amy Schumer blush, a rough blow to a studio that will be severely lacking in superhero tent poles once the long-in-the-tooth X-Men series wraps up. Let's just hope James Cameron books his next trip to Pandora for the long delayed Avatar sequels ASAP.

End of Summer Stock Prediction: Down 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
TWX Time Warner Inc. New 94.55 0.57 0.61 5,491,378
DIS Walt Disney Company (The) 103.38 2.17 2.14 16,515,701
VIAB Viacom Inc. 38.80 0.79 2.08 4,834,139
FOX Twenty-First Century Fox Inc. 28.48 0.53 1.90 2,824,648
SNE Sony Corporation 29.16 0.55 1.92 2,028,024
CMCSA Comcast Corporation Class A Common Stock 69.23 -0.10 -0.14 8,769,497

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