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HomeMarketAvatar's Success Is Helping Disney Stock. IMAX Is Also Benefitting.

Avatar’s Success Is Helping Disney Stock. IMAX Is Also Benefitting.

*** ONE-TIME USE *** Avatar: The Way Of Water

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Courtesy Disney

At the movies, it pays to be blue.

Like so many stocks that tumbled in 2022,
Walt Disney
(ticker: DIS) has bounced back in the new year, jumping more than 20% in January. And at least some part of that success as come from its blockbuster Avatar: The Way of Water: While the initial release may not have wowed, the film broke still more records this past weekend.

Disney isn’t the only winner: Just look at
‘s (IMAX) stock.

The Avatar sequel has now grossed $2.11 billion globally, a box-office showing that now makes it the fourth-highest grossing movie of all time, topping both Avengers: Infinity War and then Star Wars Episode VII—The Force Awakens. Only the original Avatar, along with Avengers: Endgame, and Titanic, have earned more money. With $2.19 billion in earnings, Titanic may be the next to fall.

Moreover, the new Avatar film easily surpassed Spider-Man: No Way Home, which had previously held the record for pandemic box-office receipts at $1.92 billion.

Not everyone has seen the movie at a giant IMAX screen—but plenty of people have. Avatar: The Way of Water brought in an additional $7.3 million for IMAX this weekend, putting total IMAX box-office receipts at $239 million. It’s the highest first-run film in IMAX history, notes Rosneblatt Securities’ Steve Frankel.

Some three quarters of the movie’s overall ticket sales have come from outside the U.S., led by Chinese viewers, who have spent $235.4 million to see the film. It’s also the second most successful IMAX movie in that nation, with some $50 million in ticket sales.

The global appeal of Avatar: The Way of Water is just one international catalyst behind both IMAX and Disney’s rallies: As Frankel writes IMAX “hit a triple,” this weekend, thanks not only to the latest installment of Avatar, but also to the $34 million it generated during the past Chinese holiday week, and the $2.5 million it earned from Pathaan, which marked the best opening weekend for an IMAX film in India.

Likewise, Marvel—owned by Disney—will see two of its superhero titles, Black Panther: Wakanda Forever and Ant-Man and The Wasp: Quantumania, debut in China next month.

The Chinese success of the Avatar sequel comes after “Hollywood studios in recent years have had an uneasy relationship with China, where government censors decide which titles can be shown at local cinemas, decisions that can make or break billions of dollars in annual revenue,” notes Benchmark analyst Mike Hickey.

IMAX didn’t have as difficult a 2022 as Disney, but it’s still enjoyed a great run recently. IMAX stock has jumped almost 15% in January, trailing the 23% rise in Disney stock, but nearly triple the
S&P 500
‘s year-to-date gain.

Certainly Avatar has been better for Disney stock: Since its Dec. 16 opening, Disney stock is up more than 11%, while IMAX stock is about flat. Nonetheless, IMAX shares are still edging ahead of the broader market over that time frame, something they haven’t managed to do much in recent years.

The pandemic certainly hasn’t been kind to either Disney or IMAX, with both stocks in the red over the past three years, even as the S&P 500 has climbed more than 20%. Yet Disney has performed far worse, falling 19.5% to IMAX’s 1.5% decline. In-person film watching in movie theaters may have been severely curbed during the pandemic, but streaming platform Disney+ still isn’t profitable.

Going back even further, IMAX has tumbled 13.9% over the past five years, while Disney is off 3.7%.

Perhaps then both companies may be hoping for more Pandora box office openings to come.


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