DreamWorks Animation [stock] is up 7.2% and has reached its highest price since February 2014 as Stifel Nicolaus upgrades the shares to Buy after an "exceptionally candid" meeting with management.
The analyst firm has set a price target of $34. ... Stifel's Benjamin Mogil says the firm came away from the meetings "more positive" after hearing about how DWA management was pivoting after problems of the last few years on movie creativity. DreamWorks' film plans are "more realistic/in-tune," Stifel notes, since "2012-2014 film challenges were tied to films which skewed older right as the box office began to see changes whereby animation demand was increasingly skewing younger as kids began to age out of the genre earlier."
The studio's TV segment was thought to decline in 2017 after peaking next year, but Stifel now sees that output deals could get extended. For consumer products: "Far more of the revenue target for the year is not tied to feature films, which grants us more comfort with the target's attainability." ...
In other words, the green eyeshade crowd likes it that DreamWorks Animation is not so dependent on creating one hit feature after another. (The brutal facts: it's a tough hat trick to perform year in and year out.)
So now that the TV work is generating more cash and looks as though it will extend farther into the future, and with more coming in from merchandising, the company looks more robust.
Add On: The Deadline version of DreamWorks' happy time here.