DreamWorks Animation Stock Surges 8 Percent After Analyst Upgrade
Shares of DreamWorks Animation climbed 8 percent Wednesday on three times normal volume after an analyst at Stifel Nicolaus upgraded the stock to “hold" from “sell” because he figures all the bad news is behind the studio and that its upcoming release, The Croods, could outperform expectations.
The Croods, about a prehistoric family on a road trip, stars Nicolas Cage, Emma Stone, Ryan Reynolds and Cloris Leachman and opens March 22. Stifel analyst Benjamin Mogil figures the family film could score $300 million at the international box office and $150 million domestically.
With The Croods a potential hit, the factors depressing DWA stock largely will be in the rearview mirror, given that the company already announced an $87 million write-down due to the poor performance of Rise of the Guardians, plus other charges related to layoffs and sending Me & My Shadow back into development.
Due to the hefty charges, DWA posted an $83 million loss in the fourth quarter. While Wall Street temporarily may have been spooked – the stock dropped 2 percent on heavy volume the day after the earnings report – the negative sentiment was short-lived. Since its last earnings report two weeks ago, the stock has risen 15 percent, including a $1.49 surge to $19.17 on Wednesday.