It’s hard to recall the last time a studio had so much riding on the performance of a single film. Following the $87M writedown for Rise Of The Guardians, and other setbacks, DreamWorks Animation is “a very hated stock on Wall Street,” Janney Capital Markets’ Tony Wible says. Short-sellers control about 24% of the outstanding shares. Just one analyst rates it a strong buy while five rate it “hold” and five classify it as either “sell” or “underperform.” Investors question whether the company can thrive as the market for family fare becomes more competitive. Since DWA only releases about two films a year, there are few opportunities to shape the company’s story. That leads us to The Croods: The consensus among analysts is that the film will generate a little north of $40M at domestic box offices this weekend, ultimately leading to a gross of $160M domestically and $290M abroad. “If they do below $40M, then people will be disappointed,” Wible says. “And north of $50M will be really good for these guys.” The Street’s cautiously optimistic. DWA shares are up 9.8% over the last month. Here’s a sampling of analysts’ estimates and commentary while they wait for the results:
Doug Creutz, Cowen & Co: (Forecast: mid $40M domestic open leading to $171.3M domestic and $214.1M international.) Overseas “we think the film needs to earn in the mid/high-$40M range this weekend to be on track to hit [Wall Street’s international box office] consensus. An open in the mid-$30M range would suggest an ultimate [international box office] much closer to our $214M estimate.”
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Barton Crockett, Lazard Capital Markets: (Forecast: $42.7M domestic open leading to $154M domestic and $305M international.) “We’re modeling a modest profit for Croods. But box office forecaster Doug Stone sees a tally that we believe could make the movie unprofitable. His predictions in the past for [DreamWorks Animation] movies have been reasonably accurate.”
David Miller, B. Riley & Co.: (Forecast: $41M domestic open leading to combined domestic and international BO of $420M.) “Should The Croods open with a [domestic box office] score less than $35M, our sense of dynamics around the stock is such that the stock would trade off measurably. Such a scenario is certainly a possibility given a notable sophomore follow-through last weekend from Oz: The Great and Powerful, which continues to have legs in the marketplace.”
Tony Wible, Janney Capital Markets: (Forecast: $45M domestic open leading to $150M domestic and about $300M international.) “One big variable worth noting is that there could be pent up demand as this is the first animated title from a major studio this year and the first new animated [intellectual property] since November. Overall, we loved the film (amazing animation, good story-line/writing, and cross-quadrant appeal) but see potential for parental reviews that will cut-off younger audiences due to its PG rating and some story-line elements.”
Eric Wold, B. Riley & Co: (Forecast: $42M domestic open, leading to $120M domestic and $300M globally). “Expectations for this movie are very low given the disappointing results Rise of the Guardians, but that came out in a tough period when Wreck-It Ralph and Hotel Transylvania were still playing. This is all by itself and kids are looking for something to see.”
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