DreamWorks Animation stock rises after ‘Home’ tops box office
It seems like DreamWorks Animation has hit a home run with its latest film, “Home.”
Shares of the studio were up $1.68, or about 7%, to $24.36 in Monday trading, following a robust $54-million opening weekend for the animated film.
It is a much needed boost for the Jeffrey Katzenberg-led studio, which has struggled in the last year with box-office misfires and a recent round of layoffs.
Shares in the company plummeted 40% in 2014 as DreamWorks faced growing competition from rivals. The studio took a $57-million write-down in 2014 for “Mr. Peabody & Sherman” and a $13.5-million charge on its summer movie “Turbo.” The studio also recorded an $87-million write-down for “Rise of the Guardians” in 2012.
But “Home” was the third-largest non-sequel opening for DreamWorks Animation, following 2008’s “Kung Fu Panda” ($60.2 million) and 2009’s “Monsters vs. Aliens” ($59.3 million).
The film, which cost a whopping $130 million to make, follows a teenage girl, Tip, who meets and befriends an alien fugitive, Boov. The two set off on a quest to find Tip’s mother. The film’s voice cast includes Rihanna, Jim Parsons, Jennifer Lopez and Steve Martin.
Reviews have been fairly strong, with moviegoers giving it a solid A grade from audience polling firm CinemaScore. Parents gave it five out of five stars.
Some analysts are skeptical as to whether the film will really have an impact on the company long-term.
The film’s domestic performance “is likely to be positive for shares int he short term,improving investor confidence in management turnaround efforts,” said Cowen & Co.analyst Doug Creutz in a research note. “However...we continue to have a hard time assuming a sustained improvement in film performance as the market for big-budget tentpole films is set to become significantly more competitive in 2016/2017.”
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