Zacks Investment Research downgraded shares of DreamWorks Animation SKG Inc. (DWA) from NEUTRAL to UNDERPERFORM on January 09, 2015, with a target price of $20.00.
DreamWorks performed encouragingly in the third quarter of 2014 reporting higher-than-expected revenues as well as earnings. The company's third-quarter 2014 earnings (excluding special items) of $0.10 per share handsomely beat the Zacks Consensus Estimate of $0.04. Higher-than-expected revenues led to the earnings beat. Despite such an impressive show, the company's movie business is still battling high volatility. Mounting marketing costs, limited number of film releases, stiff competition from large production houses and overdependence on its Feature Film business continue to act as headwinds for the company. Considering such downbeats we downgrade our recommendation to Underperform from Neutral.
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