DreamWorks Animation shares soar
Strong earnings, Goldman upgrade boost stockShares of DreamWorks Animation soared more than 25% in Wednesday trading, following a better-than-expected first-quarter earnings report after the market close Tuesday and a contract extension for CEO Jeff Katzenberg.
Also, several analysts upgraded their rating on the stock, saying concerns about future DVD sales and other challenges have been priced into the stock more than enough.
DWA shares closed up 25.2% at $23.87.
Goldman Sachs analyst Ingrid Chung upgraded DWA shares to "buy" Wednesday morning, arguing that recent negative catalysts and earnings estimate cuts are now behind the company. She raised her price target from $23 to $27.
Lazard also upgraded the stock to "buy." And UBS analyst Michael Morris upgraded the stock from "sell" to "neutral," "primarily based on updated assumptions for future DVD profitability." He explained: "Our revised assumptions reflect data provided by management reflecting both stable demand and pricing even in the current period of macro-economic weakness."
Morris has a $23 price target on DWA.
Chung also downgraded Dish Network to "neutral," saying "we see better upside in DreamWorks shares."