DreamWorks Animation Shares Rise on Analyst Coverage
Shares of DreamWorks Animation SKG, the animation film studio behind "Shrek," rose on Friday after an analyst began coverage of the company with a "Buy" rating, predicting gains from upcoming films.
The stock gained 96 cents, or 3.3%, to $30 in afternoon trading.
In a note to clients, Stifel Nicolaus analyst Drew E. Crum said DeamWorks has produced some of the most successful animated features in motion picture history.
"We believe the company's business prospects are promising, given a leading position in the attractive computer-generated film category, a strong pipeline of content augmented by a set of complimentary growth initiatives, and more accommodating operating conditions," Crum wrote in a client note.
Crum said the company's eight computer-generated films have averaged more than $210 million in domestic box office revenue.
"We believe DreamWorks Animation is well positioned to benefit from its participation in one of the most popular film genres: computer-generated animation," Crum wrote in a client note.
Looking ahead, Crum said the company has an attractive number of films in its pipeline, such as "Madagascar 2" and "Shrek 4," scheduled for release in 2010.
Near-term catalysts for the stock include the release of "Shrek the Third" on DVD and "Bee Movie," which opens in November and was written by Jerry Seinfeld.
