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Pixar Gets a Glowing Review From Wall St.

November 06, 2004|Richard Verrier | Times Staff Writer

Pixar Animation Studios got great reviews from movie critics for its newest release, "The Incredibles." But the company was perhaps even more pleased by the word on Wall Street: Buy.

Shares of the Emeryville, Calif., studio hit a record high Friday, rising $3.59 to $84.45 on the New York Stock Exchange. Among other things, investors were banking on a huge opening this weekend for "The Incredibles," which would make it the sixth straight blockbuster for the animation studio headed by Apple Computer Inc. founder Steve Jobs.

The company's shares began trading publicly in 1995, shortly after the release of its first digitally animated feature, "Toy Story," which was part of a seven-movie partnership with Walt Disney Co.

Pixar's stock has more than tripled from its initial public offering price of $22 a share, and the studio's market value now totals $4.8 billion based on Friday's close.

Negotiations between Pixar and Disney for a new movie deal broke off earlier this year. The final film under their current partnership, "Cars," is scheduled for release next year.

Analysts have estimated that "The Incredibles" -- the story of a superhero family pressed back into action -- would earn as much as $700 million in box-office sales worldwide.

That's about $200 million less than "Finding Nemo" but still big enough to give Pixar's stock a boost.

"Investors are basically assuming that Pixar will continue its perfect batting average," said analyst Anthony Valencia of TCW Group, which owns 10.7 million shares of Pixar.

Investor confidence in digital animation goes beyond Pixar. Last month, DreamWorks Animation SKG, which made the two "Shrek" movies, raised $812 million in an IPO, exceeding the company's expectations.

"Film companies," Valencia said, "are very much in vogue on Wall Street right now."

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