Early low box-office haul may not ultimately doom 'Rise of the Guardians'
Courtesy of DreamWorks Animation, ASSOCIATED PRESS
Wall Street analysts are down on DreamWorks Animation after its new film, “Rise of the Guardians,” grossed a disappointing $32.6 million in the first five days after its Nov. 21 opening, but film executives are pointing to movies like “How to Train Your Dragon” as proof that success could still be in the works for “Guardians.”
“Shares of DreamWorks Animation plunged more than 5 percent Monday after its latest feature, ‘Rise of the Guardians,’ bombed at the box office so badly that Wall Street analysts expect the studio to take a write down on its investment,” Jonathan Berr wrote for MSN Money. “This stock is a value trap that investors should avoid.”
The Associated Press reported, “Analyst David Miller downgraded DreamWorks Animation to ‘Below Average’ from ‘Average’ and cut his estimate for earnings per share in fiscal 2013 to 90 cents from $1.15. He slashed his price target on shares to $15 from $20. Miller said the studio had trouble trying to ‘cram too much character/story derivation into one 90-minute film.’ The film features Santa Claus, the Easter Bunny, the Tooth Fairy, Jack Frost, the Sand Man and the Boogieman.”
However, as the New York Times’ Media Decoder blog pointed out Monday night, DreamWorks Animation’s stock suffered a 9.2-percent dip in 2010 after a similarly disappointing opening for “How to Train Your Dragon” — and that film eventually “recovered to take in a respectable $495 million worldwide, in part because of stellar reviews; two sequels are now in the works, and the company has created a spinoff ‘Dragon’ television series and arena show.”
The Media Decoder blog continued, “DreamWorks Animation also pointed out that holiday movies like ‘Guardians’ tend to start slowly but play for a longer period, noting the initially disappointing Warner Brothers movie ‘The Polar Express’ from 2004 as one example.”
In his review of “Rise of the Guardians,” KSL radio host Doug Wright praised the movie as “a fanciful, eclectic and wonderful addition to the holiday cinematic repertoire. While loaded with action the film still carries sweetness and treats with respect time-honored tales and lore. This will be a delightful addition to family holiday entertainment for years to come.”
After closing Monday at $17.11, DreamWorks Animation stock inched upward Tuesday and finished at $17.23 — still well below its $18.05 price at the end of last week.
Jamshid Ghazi Askar is a graduate of BYU's J. Reuben Clark Law School and member of the Utah State Bar. Contact him at email@example.com or 801-236-6051.
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