Macquarie Remains Bullish on DreamWorks Animation SKG (DWA) After Spending Time with Management

Macquarie reiterated an Outperform rating and $31.00 price target on DreamWorks Animation (NASDAQ: DWA) after spending time with company management. TV is poised to grow revenue at a 19% 3-year CAGR through ‘18, with Macquarie modeling ’16 TV revenue at US$297m and gross margins of ~36%. Both of those estimates at the higher end of management’s guidance for US$275-300m and mid-30% margins.

Analyst Amy Yong commented, "We just got off the plane with IR executive Jennifer DiGrazia and what resonated with us are two budding franchises that make DreamWorks a standout among studios. Before the end of the decade, the following should comprise more than twothirds of revenue: 1) its multi-year output deals with Netflix and 10+ distributors; and 2) its 75% stake in burgeoning Gen Z platform AwesomenessTV. Its success will offset volatility in film and will force investors to rethink the business and assign a higher multiple to its high-growth, high-free cash flow steady business."

For an analyst ratings summary and ratings history on DreamWorks Animation click here. For more ratings news on DreamWorks Animation click here.

Shares of DreamWorks Animation closed at $24.99 yesterday.

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