DreamWorks Animation Shares Pop On Encouraging Report For ‘The Croods’
DreamWorks Animation Sets ‘Croods’ Sequel
The stock rose 8.4% today after Stifel analyst Benjamin Mogil upgraded his recommendation to “hold” – mostly due to his view that The Croods will generate solid box office sales after its March 21 opening. His tracking suggests that domestic ticket buyers will spend $50M on the DreamWorks Animation film in its opening weekend, which could propel it to total theatrical sales of $150M. That’s a little below Wall Street’s expectation for $160M. But investors may be pleasantly surprised by international sales. Croods will be “the first new film under the Fox distribution deal,” he says, and the News Corp-owned studio is especially strong overseas. Mogil forecasts $300M in international box office sales. If he’s right then investors’ fear that DreamWorks Animation will be hit with a second consecutive disappointment after Rise Of The Guardians will have “largely played itself out.” Indeed, he says that CEO Jeff Katzenberg’s $87M write-down for the Christmas release was “kitchen-sink in depth” which means it could “actually generate some marginal contribution” to the bottom line. Mogil says that for the long term he continues to be uneasy about “the structural nature of the business” including the company’s decision to move its premium cable rights to Netflix from HBO. But many of the biggest problems “are behind us and largely factored into [Wall Street's] views” about DreamWorks Animation’s value.