Dreamworks (DWA) shares have been hurting since a weak box-office opening for its animated 3-D film How to Train Your Dragon. Heading into today’s session, the stock was off 11% since the film’s March 26 opening.
Caris & Co. analyst David Miller says the correction has created an attractive entry point.� This morning he upgraded the stock to Above Average from Average and raised his price target to $45.
Miller contends that the Dragon is performing well in family-friendly mid-week showings, which could imply long-term strength for the film. Additionally, he says, beginning today, more 3-D theaters will open up as Alice In Wonderland moves to 2-D screens in many locations. The net result should be 150 new 3-D screens for Dragon.
Miller concludes: “We now believe that Dragon has a lot more legs than implied by this latest correction in the stock price and that there is more ‘reward’ in this story than ‘risk’ in the near term.”
Dreamworks shares are up 37 cents, or 1% , today to $38.48.
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