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Analysts Applaud Disney’s Lucasfilm Acquisition

Wall Street analysts have nearly universally applauded Disney's $4 billion acquisition of Lucasfilm, the powerhouse behind the StarWars franchise.

Patrick Fallon | Bloomberg | Getty Images

Surprisingly, the stock ended slightly lower the day after the deal, with a few analysts revising down near-term earnings expectations, before the deal becomes accretive in 2015.

However, Wall Street consensus was very positive, with analysts noting that over the next two years Disney will buy back the approximately 40 million shares it issues in this transaction. (Read More:Disney to Buy Lucasfilm in Deal Worth Over $4 Billion.)

"The deal looks more promising than the Marvel acquisition in 2009," Lazard's Barton Crocket said.

He drew a comparison between the $215 million Lucasfilm will generate this year in licensed merchandising fees and the revenue at Marvel before it was acquired.

Crocket said that Lucasfilm "has more room for a Disney boost from insourcing and expanding international as Lucas' mix is under 40 percent international versus Marvel's over 40 percent."

Barclay's Anthony DiClemente, who also compared the acquisition to Marvel, noted that "Disney is similarly attempting to harness synergies between itself and a storied franchise."

DiClemente has adjusted his estimates to reflect near-term impact on earnings-per-share, lowering his estimates for earnings-per-share for the fiscal year by 6 cents in 2013 and 3 cents in 2014.

But he stresses the positive, writing: "Disney is perhaps the best media company at monetizing its IP and rolling it through the Disney ecosystem. In addition to the box office, Star Wars IP lens itself to the theme parks (where Disney already has Star Wars attractions), to cable TV (particularly Disney XD) and to consumer products, which we think could be the biggest driver of value." (Read More: Iger, Lucas Weigh in on Disney's $4 Billion LucasFilm Acquisition.)

Deutsche Bank praised Lucasfilm's "remarkable" pedigree, saying "the strategic rationale is consistent with Disney's core philosophy."

Analyst Doug Mitchelson projected the deal will hamper earnings-per-share in fiscal 2013 by 10 cents per share. He wrote: "While investors will be disappointed with the dilutive deployment of capital, we expect this will be offset by the natural fit, neutral free cash flow per share impact, success with Marvel acquisition."

RBC Capital Markets David Bank said, "While we tend to be cynical about media M&A generally, we think this transaction makes a good deal of sense both financially and strategically."

Bank broke down a comparison between Lucasfilm's valuation and Marvel's valuation — they both carried a $4 billion price tag and a similar multiple. But Bank pointed out that the Marvel multiple is based on a big theatrical year with the release of Ironman 2, whereas Lucasfilm's multiple is based on no movie-related revenue. (Read More: Beyond Films, Here's How Disney Will Cash in on Lucas Deal.)

In a note titled "The force is with us — we like the Lucasfilms Acquisition," Wells Fargo Securities said that that there are fewer limitations or "encumbrances" than there are with the Marvel acquisition. Marvel had existing deals with Universal Studios to use its characters and the Orlando Park, and Paramount had distribution rights to certain future films. The StarWars characters aren't wrapped up in so many complicated deals, so it'll be even easier for Disney to cash in on them, than it was for them to profit from Marvel's characters.

—By CNBC's Julia Boorstin
@JBoorstin

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.