Tuesday, January 12, 2016

DreamWorks Ascending

It seems that the green eyeshade types on Wall Street think the Netflix deal and the company's oncoming animated feature is going to lift DWA up.

FBR & Co. analyst Barton Crockett on Tuesday upgraded his rating on the stock of DreamWorks Animation, citing near-term upside from the upcoming release of Kung Fu Panda 3 and recent deals with Netflix.

He upgraded the stock to "outperform" with a $29 price target and placed it on FBR's list of top stock picks. "Near-term there are potential catalysts that are likely to move the shares up," wrote Crockett. "In particular, we see potential for large checks from Netflix for movie catalog rights and expanded TV production and positive tracking for Kung Fu Panda 3, due out Jan. 29."

Crockett cited Box Office Analyst as saying tracking for Kung Fu Panda 3 is stronger than it was for Inside Out at the same point before its opening, predicting a total domestic run in the $185 million-$200 million range. Panda 3 "has no meaningful new animated movies to compete with in February and a prime spot in Chinese theaters heading into Chinese New Year, helped by a co-production relationship with affiliates of the Chinese government." ...

DreamWorks appears to have a winner with Panda #3. It also has an extended deal with Netflix, built-in profits, and a rapidly growing library of exploitable properties.

Little wonder that Barton Crockett predicts that, at least over the next year or three, DreamWorks Animation has a rosy future.


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