A local stock analyst on Tuesday upgraded shares of DreamWorks Animation SKG Inc. from “sell” to “buy,” saying that the filmmaker’s prospects over the next year are brighter than expected.
David Miller, who covers the Glendale company for West L.A.’s B. Riley & Co., raised his 12-month price target for shares from $14.50 to $23. He’s impressed by new trailers for DreamWorks’ July release “Turbo,” about the world’s fastest snail, and says the movie has potential to bring in additional revenue from toys and other consumer products.
Miller also noted that the studio’s current release, “Croods,” is likely to eventually bring in $420 million and turn a profit, in contrast with last year’s “Rise of the Guardians,” which led to a $87 million charge.
He also notes that DreamWorks stands to profit from Disney Studio’s upcoming “The Lone Ranger,’ since recent acquisition Classic Media owns intellectual property rights to the story and will gain revenue from product sales.
“With ‘The Croods’ now at levels allowing DreamWorks to begin accumulating revenue off the theatrical window, and with the all-important ‘How To Train Your Dragon 2’ release now only a little more than a year away, we would advise … media investors to begin building positions,” Miller said in a note to investors.
DreamWorks shares closed up 62 cents, or more than 3 percent, to $19.64 on the Nasdaq.