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The opening weekend success of Warner Bros. Discovery’s “Barbie” and Universal ‘s “Oppenheimer” has caught the attention of Wall Street. The films garnered $235.5 million in ticket sales, according to Sunday estimates from the two studios. The two movies, whose shared release date inspired the term “Barbenheimer” and a social media frenzy, brought droves of customers to theaters across the country. Some of them went so far as to dress in pink or black — or a combination of both — to match each film’s aesthetic. “This weekend was a watershed event, as moviegoers embraced fresh ideas, rather than the steady stream of franchise films that have dominated the release calendar,” said Rosenblatt analyst Steve Frankel in a Sunday note to clients. A ‘much-needed win’ It’s an important time for legacy entertainment companies as they attempt to rebound from 2022’s bear market while navigating the transition to streaming and the dual Hollywood strikes. Warner Bros. Discovery shares slipped more than 1% Monday, but have advanced 34% since the start of 2023. Universal parent Comcast gained more than 1% to begin the week. Shares are up about 24% this year. Paramount shares were flat Monday and have underperformed the market in 2023 with a year-to-date loss of nearly 8%. WBD CMCSA,PARA YTD mountain Warner Bros. Discovery, Comcast and Paramount in 2023 Wolfe Research managing director Peter Supino said Warner Bros. Discovery may “finally be able to read some good news on its studio franchise.” He said the positive update could help considering uncertainties around timelines of other major films including the latest “Dune” and “Aquaman” installments due to the Hollywood strikes. “Barbie” was a “much-needed win” for Warner Bros. Discovery following underperformance from “The Flash” earlier in the year, KeyBanc analyst Brandon Nispel said. Given the box office numbers, Nispel said the weekend will likely be positive for Warner Bros. Discovery stock and neutral for Comcast. On the other hand, he said it may be negative for Paramount, as the company’s latest “Mission: Impossible” release may have taken a hit from the increased competition. Beyond the studios, investors have been watching shares of Mattel , which rallied in the runup to the release of “Barbie.” The toymaker, whose doll inspired the movie, has plans for more intellectual property to hopefully become blockbusters like “Barbie.” Heading into Mattel’s earnings report Wednesday, Gordon Haskett analyst Don Bilson said the question investors want answers to is how the buzz around Barbie will affect sales in the second half of 2023 and throughout 2024. They’re also wondering if there are revenue drivers for the company outside toy sales that will be helped by the movie’s success. Looking at the bigger picture, he said investors are also contemplating whether “Barbie” has established the Mattel as a force in the film industry. Still, he said early stock moves indicate the market may be less impressed with the box office performance than Hollywood is. Mattel shares are up nearly 2% Monday and have gained 10% in July. MAT 1M mountain Mattel It’s not only Mattel hoping to cash in on the Barbie boom. More than a hundred companies, including publicly traded retailers such as Gap and Kohl’s , have deals with Mattel to sell Barbie-themed products. Roth MKM analyst David Bellinger noted Barbie-themed merchandise remains prominently displayed at discount retailer Five Below , with several items sold out online. Bellinger said it’s clearly part of a trend, as the company leaned more into the “Barbie” release than it did with products connected to movies rolled out earlier in the year. While “acknowledging that a small subset of products associated with one specific license or product lineup may not materially lift comp sales near-term, any elongated trend from this new IP could drive incremental traffic to FIVE stores and reaching a new customer set in the process,” he said in a note to clients. The big screen There’s also a read-through for stocks connected to movie theatres, analysts said. B. Riley’s Eric Wold noted IMAX screens were able to “completely dominate” this weekend for “Oppenheimer” showings. By Wold’s tally, IMAX accounted for about a quarter of domestic box office revenue with only 411 screens and approximately a fifth of the global box office with just 740 screens. “We have consistently highlighted IMAX Corporation (IMAX) as the best way to play the global exhibition industry recovery,” he said. “We believe the continued over-indexing of IMAX screens in the post-pandemic moviegoing environment provides evidence of a structural improvement of consumer demand toward the format.” The stock gained more than 6% Monday. It’s up nearly 20% this year. IMAX may also have some padding if the Hollywood strikes prompt studios to delay releases, Wold said. That’s because local language titles that are not affected by the work stoppages could generate up to a third of box office revenue on IMAX screens this year. That could spell good news for movie theater chain AMC Entertainment , according to Wedbush analyst Alicia Reese, because AMC has more IMAX theatres than competitors. But she said investor focus was split with a Delaware judge’s decision to block AMC’s share conversion plan Friday. Shares of the meme stock soared in extended trading Friday following the ruling. The stock surged more than 30% Monday. — CNBC’s Michael Bloom contributed to this report. Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of “Oppenheimer.”
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