Dolby Laboratories (DLB) Lowered to Sell at Zacks Investment Research

Zacks Investment Research cut shares of Dolby Laboratories (NYSE:DLB) from a hold rating to a sell rating in a report published on Thursday morning.

According to Zacks, “Over the past year, Dolby’s shares have underperformed the industry average. Stiff competition, price-sensitive nature of the entertainment industry and fluctuations of cinema product sales pose as significant headwinds to the company’s margins.  Also, fluctuations in cinema product sales and maturity of the digital cinema market might hurt the company’s profitability. Unfavorable recovery in the broadcast business remains a threat. Heavy dependence of the company on OEMs and a handful of major customers also make the company vulnerable to unanticipated losses. In addition, intense competition and the price-sensitive nature of the entertainment industry add to the company’s woes. However, the company is seeing strong market traction of offerings under three of its new businesses—Dolby Voice, Dolby Vision and Dolby Cinema, which will boost growth. “

Separately, B. Riley reaffirmed a buy rating and issued a $65.50 price objective on shares of Dolby Laboratories in a research report on Thursday, October 26th. Two research analysts have rated the stock with a sell rating, two have given a hold rating and one has assigned a buy rating to the stock. The company presently has a consensus rating of Hold and a consensus price target of $59.33.

Shares of Dolby Laboratories (NYSE:DLB) traded up $0.09 during trading on Thursday, hitting $64.05. 185,482 shares of the company traded hands, compared to its average volume of 319,992. The stock has a market cap of $6,552.57, a price-to-earnings ratio of 33.02, a P/E/G ratio of 2.40 and a beta of 0.85. Dolby Laboratories has a 52-week low of $47.19 and a 52-week high of $65.56.

Dolby Laboratories (NYSE:DLB) last announced its quarterly earnings data on Wednesday, October 25th. The electronics maker reported $0.45 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $0.27 by $0.18. The firm had revenue of $242.05 million during the quarter, compared to analyst estimates of $244.80 million. Dolby Laboratories had a net margin of 18.66% and a return on equity of 10.62%. Dolby Laboratories’s revenue was up 3.9% on a year-over-year basis. During the same period last year, the firm posted $0.37 EPS. sell-side analysts forecast that Dolby Laboratories will post 2.22 EPS for the current fiscal year.

In related news, CEO Kevin J. Yeaman sold 10,000 shares of the stock in a transaction that occurred on Thursday, November 2nd. The shares were sold at an average price of $58.38, for a total value of $583,800.00. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. Also, SVP Steven E. Forshay sold 9,355 shares of the stock in a transaction that occurred on Monday, October 30th. The shares were sold at an average price of $57.86, for a total transaction of $541,280.30. The disclosure for this sale can be found here. Insiders sold a total of 508,099 shares of company stock valued at $31,240,895 over the last ninety days. 43.80% of the stock is currently owned by insiders.

A number of large investors have recently modified their holdings of DLB. Zurcher Kantonalbank Zurich Cantonalbank increased its holdings in Dolby Laboratories by 9.8% in the 2nd quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 2,331 shares of the electronics maker’s stock worth $114,000 after buying an additional 209 shares during the period. The Manufacturers Life Insurance Company increased its holdings in Dolby Laboratories by 25.5% in the 2nd quarter. The Manufacturers Life Insurance Company now owns 3,564 shares of the electronics maker’s stock worth $174,000 after buying an additional 725 shares during the period. State of Alaska Department of Revenue acquired a new position in Dolby Laboratories in the 4th quarter worth approximately $198,000. Berkshire Asset Management LLC PA acquired a new position in Dolby Laboratories in the 3rd quarter worth approximately $200,000. Finally, CIBC Asset Management Inc acquired a new position in Dolby Laboratories in the 3rd quarter worth approximately $204,000. Institutional investors own 52.53% of the company’s stock.

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Dolby Laboratories Company Profile

Dolby Laboratories, Inc designs and manufactures audio and imaging products for the cinema, television, broadcast and entertainment industries. Its products for cinema include Digital Cinema Servers and Cinema Audio Products, and broadcast and other include Dolby Conference Phone and Other Products. It offers services to support theatrical and television production for cinema exhibition, broadcast and home entertainment, including equipment training and maintenance, mixing room alignment and equalization, as well as audio, color and light image calibration.

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