Should Walt Disney Co. Be Worried About Its Star Wars Franchise?

Walt Disney Co. (NYSE:DIS) stock was mostly flat in early afternoon trading on December 29. Shares have declined 1.3% week over week. Two weeks and one day has passed since the opening of Star Wars: The Last Jedi.

The film boasted the second-largest opening box office weekend in history, behind only the previous installment Star Wars: The Force Awakens. However, Star Wars: The Last Jedi had the largest first to second weekend box office drop in history, which has some worried about the future prospects of the franchise Disney paid $4 billion for in 2012.

Response from professional critics was glowing when the movie opened, but audience reviews have been mixed. A severe snowstorm in the North American east coast also coincided with the Christmas weekend. Analysts have pointed to both of these to explain the steep drop off. However, there are other reasons for concern going forward.

There are rumours that Disney is concerned its next stand-alone Star Wars film, Solo: A Star Wars Story, could disappoint relative to its previous stand-alone Rogue One: A Star Wars Story which pulled in over $1 billion. The upcoming installment was mired by difficulties in production. Lucasfilm fired the first two directors over “creative differences” six months into filming and Ron Howard took over to reshoot.

Disney stock has climbed 3.7% in 2017 and recently announced the $52 billion acquisition of Twenty-First Century Fox Inc. Disney will be facing headwinds over the next few quarters with Fox assets struggling in many areas and ESPN bleeding subscribers.

If its Star Wars franchise begins to show weakness in 2018, next year could be a difficult year for Disney stock.