Piper Jaffray Reiterates Overweight, $22 PT On RealD

Piper Jaffray reiterated an overweight rating and $22 price target on 3D movie theater provider RealD

today in a new research note. That price target is more than double where the stock currently trades. “We believe the major reconciling item is likely to be the disappointment of Happy Feet 2. We had originally forecasted $165M but the film will likely do less than half of that. Puss in Boots has also not released in many international markets, so it remains a wild-card as well. The film modestly disappointed in the domestic market, but has opened very strongly in the two foreign markets where it has been released (Russia and Ukraine). These early releases suggest a Shrek-like international performance of 2X the domestic box relative to our forecasts of 1.4X. The remaining key factor to monitor for the current quarter is how well existing 3D releases continue to play as no new 3D films are to be released between now and the end of the fiscal quarter (ends 12/23) except the Adventures of Tintin which releases on the 23rd,” Piper said in the note.