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March 8, 2013
15:01 EDTDWADreamWorks volatility low; shares up from historic lows into “The Croods"
DreamWorks April call option implied volatility is at 27, June and September is at 30; below its 26-week average of 36 according to Track Data, suggesting decreasing price movement into the theatrical release of “The Croods”.
News For DWA From The Last 14 Days
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November 26, 2014
12:13 EDTDWADreamWorks advances following Morgan Stanley upgrade
Shares of movie maker DreamWorks Animation (DWA) are climbing after Morgan Stanley upgraded the stock to Overweight, saying that the company should be able to monetize its intellectual property/consumer products business and cut its film making costs in 2015. WHAT'S NEW: After DreamWorks invested a significant amount of money in its intellectual property/consumer products business over the last two to three years, investors are probably underestimating the return on that investment, Morgan Stanley analyst Ryan Fiftal wrote. "Multiple consumer product revenue streams should ramp in 2015," with revenue from the business increasing to about $150M over the next three years, up from about $50M in 2012, wrote Fiftal. Meanwhile, the company has several ways to cut its risk by reducing its film production costs, the analyst believes. For example, it can reduce its investments in new technology and shorten production times using new animation toolkits, the analyst stated. DreamWorks could also benefit from consolidation in the film industry, given the rising demand for high quality video content and the relatively low valuation of the company's core film studio, the analyst stated. DreamWorks appears to trade at a forward multiple of 8x-9x its earnings before interest, taxes, depreciation, and amortization, at the low end of media companies and well below the 12x-13x EBITDA multiple of another publicly traded movie maker, Lionsgate (LGF), the analyst wrote. Fiftal believes that DreamWorks' risk/reward ratio is favorable and upgraded the stock to Overweight from Neutral. He placed a $27 price target on the shares. PRICE ACTION: In early afternoon trading, DreamWorks gained 50c, or 2.2%, to $23.61.
10:11 EDTDWAOn The Fly: Analyst Upgrade Summary
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08:01 EDTDWADreamWorks Animation upgraded to Overweight from Equal Weight at Morgan Stanley
Morgan Stanley upgraded Dreamworks to Overweight from Equal Weight to reflect IP monetization potential. The firm notes Dreamworks has hired more than 200 sales employees for global IP licensing and consumer products and believes consensus estimates underestimate ROI as TV revenues and AwesomenessTV profits ramp in 2015. Price target is $27.
07:52 EDTDWADreamWorks Animation upgraded to Overweight from Equal Weight at Morgan Stanley
Price target is $27.
November 19, 2014
10:00 EDTDWAOn The Fly: Analyst Initiation Summary
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10:00 EDTDWAOn The Fly: Analyst Upgrade Summary
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07:32 EDTDWADreamWorks Animation upgraded to Neutral from Underperform at BofA/Merrill
BofA/Merrill reinstated Dreamworks (DWA) with a Neutral rating from a Sell rating following reports that merger conversations with Hasbro (HAS) have ceased. The analyst now expects shares to trade in-line with peers given the upcoming Penguins of Madagascar release and active investigation of strategic opportunities. Price target is$25.
07:26 EDTDWADreamWorks Animation reinstated with a Neutral at BofA/Merrill
Target $25.
November 17, 2014
16:24 EDTDWAOn The Fly: Closing Wrap
Stocks on Wall Street were quiet and traded in a fairly narrow range for their sixth straight session, despite a "merger Monday" that saw over $100B in deals announced. The Dow and S&P, which began the week near record levels, passed back and forth across the flat line several times during the day, though the Nasdaq weakened early in the session and never really recovered. ECONOMIC EVENTS: In the U.S., industrial production fell 0.1% in October, missing expectations for it to have risen 0.2% from the prior month. October capacity utilization came in at 78.9%, which fell short of the expected 79.3% rate. The Empire State manufacturing index, which reflects manufacturing activity in the New York region, rose 4 points to 10.2 in November, which was generally in-line with the consensus forecast. In Asia, Japan's GDP unexpectedly shrank an annualized 1.6% last quarter, missing projections for a 2.2% gain and sinking its economy into a recession. COMPANY NEWS: Actavis (ACT) gained $4.17, or 1.71%, to $247.94 after confirming that it agreed to acquire Allergan (AGN) for a combination of $129.22 in cash and 0.3683 Actavis shares valued at approximately $66B, or $219 per Allergan share. Valeant Pharmaceuticals (VRX), which had been in a contentious fight to buy Allergan, commented that it "cannot justify to its own shareholders" paying a price of $219 or more per share for the Botox maker, whose stock rose $10.55, or 5.31%, to $209.20... Halliburton (HAL), conversely, fell $5.85, or 10.62%, to $49.23 after it agreed to acquire Baker Hughes (BHI) in a stock and cash transaction valued at $78.62 per Baker Hughes share, representing an enterprise value of $38B. When the deal talks were first reported by The Wall Street Journal last week, antitrust concerns were highlighted by analysts, but Halliburton said it had agreed to divest businesses that generate up to $7.5B in revenues, if required by regulators, and agreed to pay a fee of $3.5B if the transaction terminates due to a failure to obtain required approvals. Baker Hughes rose $5.34, or 8.92%, to $65.23 after the deal was announced. MAJOR MOVERS: Among the notable gainers was Celldex Therapeutics (CLDX), which advanced $4.09, or 28.88%, to $18.25 after the company reported it saw a statistically significant overall survival benefit, along with an increase in clinically meaningful tumor shrinkage, in a sub-group of its study of a drug to treat a specific type of brain tumor. Also higher was Amicus Therapeutics (FOLD), which rose $1.01, or 17.75%, to $6.70 after the company announced additional data on secondary endpoints from its second Phase 3 study of its treatment for Fabry disease. Among the noteworthy losers was William Lyon Homes (WLH), which fell $3.52, or 15.53%, to $19.14 after the company announced that it intends to offer, subject to market and other conditions, 1M tangible equity units, which will consist of a prepaid stock purchase contract and an amortizing note. Also lower were shares of DreamWorks (DWA), which dropped $3.71, or 14.26%, to $22.31 after multiple media outlets reported that talks about a takeover of the company by Hasbro (HAS) had ended. INDEXES: The Dow gained 13.01, or 0.07%, to 17,647.75, the Nasdaq lost 17.54, or 0.37%, to 4,671.00, and the S&P 500 added 1.50, or 0.07%, to 2,041.32.
12:27 EDTDWAOn The Fly: Midday Wrap
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10:10 EDTDWADreamWorks sinks, Hasbro rebounds after takeover talks reportedly end
Shares of movie maker DreamWorks (DWA) are tumbling after multiple media outlets reported that talks about a takeover of the company by Hasbro (HAS) had ended. WHAT'S NEW: Talks about an acquisition of DreamWorks by Hasbro have ended, multiple news outlets including The Wall Street Journal and Deadline reported over the weekend. However, Deadline, citing unnamed sources, reported that there's "still a slight chance" that the talks will resume. Hasbro's CEO and board visited DreamWorks' campus recently and a potential name for the combined entity - DreamWorks-Hasbro - was discussed, Deadline stated. Hasbro halted the talks because it became concerned about the negative reaction of its stock to reports about the discussions, Deadline added. Barron's weighed in on the issue over the weekend, writing that the deal "doesn't make sense economically." Partnering with DreamWorks would be logical for Habro, but buying DreamWorks would not be a good move for the toy maker, Barron's stated. DreamWorks' recent inability to create big hits or generate free cash makes it a poor takeover target for Hasbro, Barron's indicated. WHAT'S NOTABLE: In a note to investors on Thursday, Sterne Agee analyst Vasily Karasyov wrote that there is "no industrial logic" whatsoever to a combination of DreamWorks and Hasbro. Karasyov said there was no good reason for Hasbro to buy DreamWorks for $35 per share, the price that the movie maker was seeking, according to some reports. Karasyov predicted that the deal would not occur and kept a $17 price target and Underperform rating on the shares. Additionally, Piper Jaffray said the possible acquisition of DreamWorks Animation by Hasbro could have impacted the latter company's partnership with Disney (DIS). Piper thought buying a competing animation company could alter Disney's view of Hasbro as a partner. PRICE ACTION: In early trading, DreamWorks fell 15% to $22.08, while Hasbro gained 4.3% to $56.33.
09:59 EDTDWADreamWorks Animation tumbles as Hasbro ends talks, levels to watch
The shares are down nearly 15% at time of writing to $22.20 after Hasbro (HAS) ended talks to purchase the company. At that price next support is at $21.70 and then at $21. Resistance is at $22.78.
09:22 EDTDWAOn The Fly: Pre-market Movers
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November 16, 2014
18:05 EDTDWAHasbro buyout of DreamWorks Animation 'doesn't make sense', Barron's says
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November 15, 2014
08:28 EDTDWAHasbro ends DreamWorks talks after stock decline, Deadline reports
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08:25 EDTDWAHasbro, DreamWorks talks 'cool,' unlikely to resume, WSJ reports
Hasbro's (HAS) talks to acquire DreamWorks Animation (DWA) have "cooled" and are unlikely to resume, Wall Street Journal reported last night, citing a person familiar with the matter. Reference Link

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