Barclays Maintains an 'Underweight' on DreamWorks Animation (DWA); StreamWorks: Inking Deal with NFLX
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Price: $40.97 --0%
Rating Summary:
3 Buy, 6 Hold, 6 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
3 Buy, 6 Hold, 6 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Barclays maintains an 'Underweight' on DreamWorks Animation (NASDAQ: DWA) price target of $18.00.
Barclays analyst says, "Yesterday, DreamWorks announced an exclusive, multi-year distribution deal with Netflix (Nasdaq: NFLX), granting the broadband distributor both linear and digital rights to DWA films in the Pay TV window (starting with 2013 releases), library content which has exited the pay TV window, and certain TV specials. We believe the deal represents an incremental positive for DWA as it has now secured fair market value for the digital rights associated with its content. But until we know more about the timing and size of the revenue opportunity for DWA's library product, we remain guarded on the shares, as we believe the deal is unlikely to materially improve the near-term earnings power of the company. Therefore, we are maintaining our rating and price target."
"Separate from the DWA/ NFLX output deal, we are trimming our 3Q and FY'11 estimates, primarily to reflect slightly lower gross margins, owing to a higher amortization rate for Megamind revenues. We are now modeling $0.20 of EPS in 3Q (vs. $0.28 previously) and $1.22 of EPS for FY 2011 (vs. $1.34 previously)."
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 $18.88 yesterday.
Barclays analyst says, "Yesterday, DreamWorks announced an exclusive, multi-year distribution deal with Netflix (Nasdaq: NFLX), granting the broadband distributor both linear and digital rights to DWA films in the Pay TV window (starting with 2013 releases), library content which has exited the pay TV window, and certain TV specials. We believe the deal represents an incremental positive for DWA as it has now secured fair market value for the digital rights associated with its content. But until we know more about the timing and size of the revenue opportunity for DWA's library product, we remain guarded on the shares, as we believe the deal is unlikely to materially improve the near-term earnings power of the company. Therefore, we are maintaining our rating and price target."
"Separate from the DWA/ NFLX output deal, we are trimming our 3Q and FY'11 estimates, primarily to reflect slightly lower gross margins, owing to a higher amortization rate for Megamind revenues. We are now modeling $0.20 of EPS in 3Q (vs. $0.28 previously) and $1.22 of EPS for FY 2011 (vs. $1.34 previously)."
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 $18.88 yesterday.
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