Barclays Maintains an 'Underweight' on DreamWorks Animation (DWA); 2Q Mostly in Line; No Update on NFLX Deal

Barclays maintains an 'Underweight' on DreamWorks Animation (NASDAQ: DWA) price target of $18.00.

Barclays analyst says, "DWA reported 2Q results mostly in line with our estimates, including operating income of $47M and diluted EPS of $0.40. Without any updated commentary on the company's aftermarket strategy, and further evidence of easing 3D tailwinds combined with a more competitive landscape for Computer-Generated Imagery ("CGI") animation, we are maintaining our rating and PT."

"We are tweaking down our 2011 EPS estimate to $1.34 from $1.40 to reflect the impact of a larger-than-expected portion of theatrical revenues for KFP2 being realized in the 2Q, as well as a deceleration in library revenues in 2H'11 due to slowing DVD sales. We are also taking down our 2012 EPS estimate to $1.55 from $1.62, as we are now modeling slightly higher costs of revenue."

For more ratings news on DreamWorks Animation click here and for the rating history of DreamWorks Animation click here.

Shares of DreamWorks Animation closed at $21.57 yesterday.

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