DreamWorks Animation SKG Inc. should get a boost next year from the film "How to Train Your Dragon," a Janney Montgomery Scott analyst said Wednesday as he upgraded the company's stock.
In a note to clients, Janney analyst Tony Wible upgraded the company to "Buy" from "Neutral."
Wible said after a screening of "How to Train Your Dragon," he believes "the film is shaping up to be a major hit with a strong marketing campaign, merchandise opportunities, and franchise value."
The movie comes out next year in 3-D. Wible said DreamWorks plans to market the film heavily during the winter Olympics, online and with an iPhone application.
He estimates DreamWorks films make an average of 3 percent to 8 percent of their revenue with merchandise, but said "How to Train Your Dragon" should do better with its dragon and Viking characters.
Given the greater earnings potential, Wible pushed his price target for DreamWorks shares up to $45 from $37.50.