Breaking Down The Big Opening Weekend For 'LEGO Batman'

Warner Bros.' "LEGO Batman" opened as the No. 1 movie as expected, "although the $55.6mm domestic result admittedly lagged more optimistic tracking and the studio's $60mm expectation,” Wunderlich’s Matthew Harrigan said in a note.

The analyst maintained a Buy rating on Time Warner Inc (NYSE: TWX), with a price target of $107.50.

Harrigan mentioned the film received an ACinemaScore and could have the potential to over $200 million domestically, which is below the $257.7 million for The LEGO Movie in 2014.

“LEGO Batman should generate ample ROI given its modest $80mm production cost per Variety. The film also generated $37mm in overseas box office this opening weekend, taking its global cume to $92.6mm,” the analyst stated.

The movie still has to open across major territories, including China and Japan. The 2014 LEGO movie generated 45.1 percent of its final lifetime gross from the international markets.

In addition, the "LEGO Ninjago" Movie is scheduled for release in September, with its trailer debuting off "LEGO Batman."

Valuable Business

“LEGO Batman ties in at least peripherally to the DC Comics consumer products biz. This biz generated $4.5B in global spending at retail in 2016 according to CEO Jeff Bewkes on last week's earnings call,” Harrigan pointed out.

Warner Bros. is also expected to meaningfully benefit from the release of the "Injustice 2" console game in March, following a year during which game results were adversely affected by very tough comparisons.

Calling Warner Bros. “the crown jewel” among all of Time Warner’s businesses, the analyst valued the studio at more than $22 billion, representing almost 24 percent of the company’s asset value by business.