NEW YORK (AP) — Shares of Pixar Animation Studios traded lower Thursday after an analyst said the film company’s hot stock has run its course and is now priced to perfection.
The Emeryville, Calif., creator of “Toy Story” and “Finding Nemo”, whose stock ended 2005 up 25 percent, shed $1.90, or 3.3 percent, to trade at $56.26 in the afternoon on the Nasdaq.
Pixar “has had a major run recently,” Credit Suisse First Boston analyst William B. Drewry said in a client note. Since early October of last year, the company’s shares have increased 31 percent, outperforming the Standard & Poor 500 Index by 24 percent, he said.
“At current levels, the stock looks fully priced, in fact, the stock seems priced for perfection,” Drewry said.
Drewry downgraded Pixar’s shares to “Neutral,” from “Outperform,” but maintained his price target of $55.
Speculation about Pixar’s relationship with Walt Disney Co. has surrounded the company for months and is among the factors that has helped lift it shares. Pixar and Disney have been in talks for months over a new distribution deal, with some on Wall Street suggesting that Disney might buy Pixar.
The takeover chatter helped push Pixar’s stock up nearly 8 percent just on Wednesday. Harris Nesbitt analyst Jeffrey B. Logsdon said in a client note Thursday that there are several reasons why Disney may be considering buying Pixar, including the company’s creative resources and production expertise.
Logsdon said acquiring an asset “of this quality” could drive a number of Disney’s businesses and “be the best capital investment Disney could make.”
CSFB’s Drewry said that while he believes a takeout of Pixar by Disney longer term is still possible, “the stock at this price seems to anticipate most of that as well.”