BoA Affirms Sell on Pixar

Analyst Michael Savner says the digitial animation studio's DVD sales patterns for The Incredibles is not indicative of a fundamental problem in the company's business

Banc of America affirms sell on digital animation studio Pixar (PIXR ).

Analyst Michael Savner says he is reaffirming his sell rating to reflect higher-than-expected return reserves for home video units of "The Incredibles". However, he doesn't think the shortfall is indicative of a fundamental problem in the company's business.

Instead, he says it could indicate that DVD sales patterns are starting to look more like theatrical sales patterns, where there's a potential late-2005 pickup in the box office. He still feels Pixar's valuation is too lofty to be supported by fundamental trends.

Despite the shortfall, Savner ups his $1.06 2005 earnings per share estimate (which is well below the Street's $1.19), to $1.10.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE