Analyst James Marsh upgraded Dreamworks Animation Skg Inc (DWA) earlier this year after the company announced a restructuring and made some management changes.
“Basically what has been happening at DreamWorks over the last few years is the company has been trying to diversify away from feature films and build the television business, build the consumer products business, and a new media unit. So when the company releases the next blockbuster film, they have multiple ways to monetize that hit, and I think it was the right strategy,” Marsh says.
Marsh thinks restructuring is the right approach and that DreamWorks will lower its film production costs substantially. The investments the company has made in consumer products are starting to pay off, and Marsh says it seems to be one of the only major media companies that has a digital business that seems to be working.
“So we like the DreamWorks story a lot at this level. And I think next year, TV business will still be doing $200 million-plus in revenues,” he says. “You have a new ‘Shrek‘ movie coming out. So I think it will be off to the races for DreamWorks as you go into 2016.”
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