Pali Research Increases Price Target on DreamWorks Animation (DWA) - Maintains 'Buy' Rating

June 27, 2008 9:02 AM EDT

Pali Research maintains a 'Buy' rating on DreamWorks Animation (NYSE: DWA), but raises price target from $32 to $35.

Pali analyst says, "With Kung Fu Panda already at $165 mm domestically, we believe it is well on its way to exceeding $200 mm in domestic box office and should be able to exceed $300 mm in foreign box office (still very early in the film’s overseas rollout)...While we are making modest upward revisions to our earnings model in 2009, based on overall awareness for DWA’s November release of Madagascar 2, the more significant earnings increase occurs in 2011, where we have layered in a sequel for Kung Fu Panda...DWA is also a particularly attractive stock within the media sector given its lack of advertising exposure. While a weaker economy could hurt DVD sales, we believe the company’s increasingly successful (and valuable) content more than mitigates near-term economic risk."

DreamWorks Animation SKG, Inc. (DreamWorks Animation) is engaged in developing and producing computer-generated (CG) animated feature films.

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