The Walt Disney Co. (DIS -1.62%) has some exciting things in its pipeline, many of which we only just learned about at its D23 Expo in August. Yet the stock has still fallen around 16% since its most recent earnings release on Aug. 4, largely because of concerns that its media segment is unable to keep up with a market more interested in streaming services instead of paid cable.
The company seems oversold now, and it might be a great time to buy in as the company prepares to expand in each of its other segments. Here are five of the most exciting things to come from Disney in the months and years ahead.
All things Star Wars
The new Star Wars movie box-office sales are expected to be huge, estimated by some analysts to be in the top three highest box office-grossing films of all time. However it's not just the box-office sales that are going to make Star Wars such a successful franchise -- It's the theme park rides, video games, break-off TV series, product licenses, and especially consumer products that will really boost Disney's bottom line. Some analysts predict Disney could make $5 billion in Star Wars product sales in the first year alone.
A Star Wars costume contest. Photo: StarWars.com
A deep stable of thoroughbred movie properties
We've known for some time now about Star Wars Episode VII, new Marvel movies, the new Pirates of the Caribbean movie planned for 2017, and many more exciting films. However, Disney announced many more new movies in production or in the pipeline at its August D23 Expo, such as Toy Story 4; Gigantic, an animated version of the Jack and the Beanstalk story that has the same songwriters as Frozen; Moana, an animated musical about a Pacific Islander princess; and more.
Theme-park upgrades and expansion
Disney's theme-park segment is its second largest behind media networks, but it looks to be the one poised to lead much of Disney's growth in the coming years. The biggest growth driver in the near future will be the new Shanghai Disney Resort, opening within the next few quarters. According to forecasts, this theme park is likely to be the most attended park in the world, at 25 million visitors in its first full year open, compared with around 20 million for Disney's Magic Kingdom in Orlando.
It's not just new parks that are going to increase revenue, but also parks here in the U.S. that continually have exciting fan-pleasing additions driving increased attendance at each park. For instance, we learned at the D23 expo that there will be an all-new Star Wars Land, Avatar Land, Toy Story Land, and much more at Disney parks in the coming years. Disney's theme-park revenue grew 4% year over year to $4.1 billion in the most recent quarter, but with all of these big changes, especially the park in Shanghai, expect that number to jump much higher next year.
A mockup of a Star Wars Land feature. Photo: Disney's official Disney Parks blog.
Playmation: play on a whole new level
Playmation is the "evolution of play," according to Disney. Imagine virtual reality mixed with consumer products, and you get these connected devices that allow users to experience the characters and stories from their favorite Disney movies more in depth than ever before. With interactive toys, wearables, and other technology, Playmation could be a major boost in consumer-product sales for Disney.
Regrowth in Interactive
Disney's Interactive segment makes games and other electronic interactive products that don't fall within the regular consumer-products segment and has actually been Disney's worst performer, as revenue dropped 22% year over year in the most recent quarter. However, there are some developments in the pipeline here that could make this segment perform much better by this time next year, such as the development of the successful Disney Magic Kingdoms games for iPhone, iPad, iPod Touch, Android, and Windows Phone, as announced at the D23 Expo.
Is Disney a buy now?
Consumers who are cutting the cable cord are putting pressure on Disney's media segment, its largest, which could lead to short-term issues as properties such as ESPN (which alone makes up about two-thirds of the media segment) must work to shift its delivery model in a changing market.
However, over the long term Disney still has huge growth potential, with these five things and many more exciting additions. Now that the company's share price has dropped, and shares are trading at just 21 times earnings and only 18 times expected 2017 fiscal year-end earnings, Disney looks like an even more attractive long-term investment.
