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How Disney’s Theme Parks Can Help Boost Revenues

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May. 1 2019, Published 8:17 a.m. ET

Disney’s investment in theme parks

Walt Disney (DIS) has been significantly investing in its theme parks and has boosted revenues for the past several quarters. In the first quarter of fiscal 2019, Disney’s Parks, Experiences & Consumer Products segment reported revenue growth of 5% YoY, while the operating income rose 10% YoY driven by the consistent increase in the number of parks and resorts, led by increased guest spending and higher occupied room nights.

J.P. Morgan analyst Alexia Quadrani raised the firm’s price target on April 29 on the back of its increased attendance at its theme parks.

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Star Wars theme parks

Disney is gearing up to launch two Star Wars-themed domestic parks, along with its Disney+ streaming service and new movies for 2019. All these positive factors also led Citi to raise its price target on Disney to $160 from $132 on April 30.

Disney has plans to open Star Wars: Galaxy’s Edge parks in both Disneyland and Disney World by the summer of 2019. The company successfully opened Toy Story Land in Shanghai and Toy Story Land in Orlando in 2018 and has planned substantial investments in new hotels, cruise ships, and many more parks in Paris, Tokyo, and other cities around the world.

Park and entertainment peers like Comcast (CMCSA) and SeaWorld Entertainment (SEAS) also have been investing in theme parks to attract more crowds.

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