By George Glover
Hollywood is back, and entertainment industry stocks are finally worth a look.
This coming weekend may not look like the best for debuts -- a Naked Gun remake starring Liam Neeson and the animated heist comedy The Bad Guys 2 are the headline new releases. Still, it's hard to overstate how strong the 2025 film slate has been. A Minecraft Movie, which grossed almost $1 billion worldwide thanks to memes and Gen. Z hype, got things going, while vampire thriller Sinners, race-car drama F1: The Movie, and reboots of Superman and The Fantastic Four have kept the ball rolling.
Hollywood was in desperate need of some heroes. Film stocks had a tough time during the pandemic -- save for meme-favorite AMC Entertainment Holdings -- and just when the unlikely double act of Barbie and Oppenheimer looked set to revive the U.S. box office, the writers' and actors' strikes disrupted production for much of 2023 and 2024. Now it looks like the industry is finally hitting its stride.
Walt Disney should benefit from the rebound. Shares have struggled for the past decade but are up 8% in 2025, in line with the broader market. There's reason to think they can keep on climbing. Disney's studios division has switched up its strategy to aim "for bigger hits, but at the cost of fewer at-bats," MoffettNathanson analyst Robert Fishman wrote in a recent research note. Subsidiary Marvel is set to release just two films next year, but they are new Spider-Man and Avengers titles. The last two installments in those franchises grossed a combined $4.7 billion.
Analysts expect Disney's operating profit to jump 12% to a record $17.5 billion in 2025, then by another $5 billion over the next three years. The Marvel sequels, as well as fresh Avatar and Toy Story flicks coming out over the next 12 months, will help fuel that growth.
Disney's focus on surefire blockbusters could also be good news for IMAX, as a solid economy and strong film slate makes customers willing to pay up to see big-budget projects in higher resolution. Tickets for IMAX screenings of Christopher Nolan's The Odyssey have already sold out, even though the Oppenheimer follow-up isn't set to debut until July 2026.
Shares are up just 5% this year, though IMAX just posted its highest-grossing quarter ever for the domestic box office. The stock is trading at about 22 times future earnings, which makes it look fairly valued compared with the broader market. The consensus price target of just over $33 implies IMAX can jump 23% from its current level.
Don't count out other movie-theater chains, either: MoffettNathanson's Fishman recently hiked his earnings before interest, taxes, depreciation, and amortization, or Ebitda, and revenue targets for Cinemark Holdings. He expects the movie-industry rebound, coupled with a greater number of releases to theaters from streamers like Amazon.com and F1 producer Apple, to lift the company's bottom line.
The box-office revival might even boost Warner Bros. Discovery. Its DC Comics adaptations have been no match for Marvel in the past, but Superman has already made more than half a billion dollars, building on the second-quarter success of Minecraft and Sinners.
Shares have taken a beating this decade, but they're up 30% this year, benefiting from excitement about a looming breakup that will separate the Warner Bros. film studio and its HBO Max streaming service from a faltering cable-TV business. Analysts expect Ebitda for the studios and streaming divisions to jump 52%, to $3.5 billion, this year.
Superhero flicks, videogame adaptations, and sports dramas have all thrived in a blockbuster summer for the film industry. Investors and moviegoers alike should be reaching for the popcorn, because Hollywood's rebound is here to stay.
Write to George Glover at george.glover@dowjones.com
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(END) Dow Jones Newswires
August 01, 2025 21:31 ET (01:31 GMT)
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