Pixar soars on investor confidence - East Valley Tribune: Business

Pixar soars on investor confidence

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Posted: Monday, November 8, 2004 5:45 am | Updated: 6:08 pm, Thu Oct 6, 2011.

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 debut this weekend for ‘‘The Incredibles,’’ making it the sixth consecutive blockbuster for the animation studio headed by Apple Computer Inc. founder Steve Jobs.

Pixar began trading publicly in 1995, shortly after the release of its first digitally animated feature, ‘‘Toy Story,’’ as part of a seven-movie partnership with Walt Disney Co. Since then, Pixar’s stock price has more than doubled, with the market value of the company climbing from $1.5 billion to an estimated $4.7 billion based on Friday’s share price.

Negotiations between Pixar and Disney broke off earlier this year. The final film under their partnership, ‘‘Cars,’’ is scheduled for release next year. Anaylsts 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 more than $800 million in an initial public offering, exceeding the company’s own expectations.

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