Wedbush Morgan Downgrades DreamWorks Animation SKG (DWA) to Hold; Valuation Call

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DWA Hot Sheet

Rating Summary:
1 Buy, 3 Hold, 6 Sell

Rating Trend: = Flat

Today's Overall Ratings:
Up: 22 | Down: 8 | New: 36

Wedbush Morgan downgrades DreamWorks Animation SKG (NYSE: DWA) from Buy to Hold. Price target increased from $25 to $27.

Wedbush analyst says, "We are downgrading DWA shares to HOLD from BUY on valuation, even though our fundamental view of the company remains largely unchanged. With Monsters vs. Aliens behind us, the stock has approached our target, and we expect the shares will be range-bound until investors have greater earnings visibility into 2010. We are slightly lowering our Q2 estimates for Monsters vs. Aliens international box office, but our EPS estimates remain above consensus. Monsters vs. Aliens has grossed nearly $194 million domestically, but international performance has lagged our expectations. We are lowering our international box office estimate to $205 – 210 million compared to our original $283 million estimate, causing us to lower our EPS estimates. For Q2, we are reducing our revenue and EPS estimates to $130 million and $0.24, respectively, from $149 million and $0.30. Our full-year 2009 estimates now call for revenue of $726 million and EPS of $1.64, both above consensus."

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