DreamWorks (DWA) Cuts Costs but Needs Mass Appeal to Maintain Profitability - Goldman

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Goldman Sachs today maintained a Sell rating on DreamWorks Animation (NASDAQ: DWA) and trimmed its price target to $16.00 (from $17.00).

"DWA reduced its 2013 theatrical slate to 2 films from 3 in response to competition from 4 quadrant (i.e., mass appeal) releases. Even with the pending reduction to film costs, we believe the profitability of DWA films hinges on hitting all 4 quadrants. In contrast, the profitability of lower cost animated films at rival studios can be driven by the attendance of family audiences," said analyst Drew Borst.

For an analyst ratings summary and ratings history on DreamWorks Animation click here. For more ratings news on DreamWorks Animation click here.

Shares of DreamWorks Animation closed at $16.61 yesterday, with a 52 week range of $15.90-$22.98.

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