DreamWorks Shares Drop After Abysmal Opening Weekend Of ‘Penguins’ Film
Uri Gruenbaum | Dec 02, 2014 10:10AM ET
Dreamworks (NASDAQ:DWA) has not been looking so good for investors lately, and its abysmal opening weekend of ‘Penguins of Madagascar’ did not make matters any better.
The latest sequel of the Madagascar franchise brought in a mere $36 million in domestic box office revenue over the five-day holiday weekend. As a result, shares of DreamWorks dropped 8% in trading on Monday morning.
Since the end of its ‘Shrek’ franchise, DreamWorks has been struggling to keep up with huge competitors like Walt Disney's (NYSE:DIS) Pixar and Universal Studio’s ‘Despicable Me’ franchise. In fact, DreamWorks shares have plunged 38% to $22 so far this year.
However, DreamWorks has several films slated through 2016, including “Kung Fu Panda 3” next year that the entertainment company hopes will mark a positive turnaround.
A Financial Expert’s Opinion
In a research note on December 1st, FBR Capital analyst Barton Crockett downgraded his rating for DreamWorks from Perform to Underperform and slashed his price target from $20 to $14.
Prior to the ‘Penguins of Madagascar’s’ opening weekend, Crockett had forecasted that the film would rake in $66 million in domestic box office revenue. His downgrade stems from the fact that the film brought in half what he had expected.
Crockett noted, “The [box office] miss highlights issues that we see weighing on DWA stock: rising competition—especially from Disney—and DreamWorks’ difficulty in sustaining momentum in its post-Shrek franchises. A more skeptical stance on these issues accompanies an estimate reduction from the Penguins miss.”
Crockett also slashed his total U.S. box office forecast for the film by $80 million to $116 million, $100 million less than the $216 million that “Madagascar 3: Europe’s Most Wanted” grossed in 2012.
Crockett has rated DreamWorks 5 times, earning a +31.9% average return per recommendation.
Barton Crockett’s Past Recommendations
Crockett has experience in rating stocks in the entertainment industry such as 21st Century Fox A Inc (NASDAQ:FOXA) and Netflix (NASDAQ:NFLX). Past recommendations have helped him earn a 69% overall success rate recommending stocks and a +10.3% average return per recommendation.
The analyst last rated 21st Century Fox with a Buy on October 31st of this year when the stock was worth $34.35 a share. Since then, the stock price has risen to $37.28. Crockett has rated the stock 4 times with a 75% success rate.
Get The News You Want
Similarly, Crockett last gave a Buy rating on Netflix on April 26th of this year. Since then, the stock price has gone up from $215.55 to $341.81. The analyst has rated Netflix 17 times with a 75% success rate.
However, Crockett has not always seen such positive results from his recommendations. The analyst has rated Liberty Interactive Ventures 12 times since November of 2013 with only an 18% success rate.
Conclusion
DreamWorks is seeing the negative backlash from the less than impressive opening weekend of its latest film with Crockett remaining bearish. Do you trust his latest recommendation based on his financial advice history?
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.