Disney dips on ‘Cars’ box office
Shares of The Walt Disney Co. dipped slightly Monday, then rebounded, reflecting weaker box-office receipts than expected for the opening weekend of the Pixar animated film "Cars."
Disney fell 39 cents to $28.94, in midafternoon trading on the New York Stock Exchange, but was down as much as 85 cents, or 3 percent, earlier in the day.
The film, the first since Disney bought Pixar Animation Studios for $7.4 billion, was the top movie at the weekend box office. The take was estimated Sunday at $62.8 million but actual figures released Monday put ticket sales for "Cars" lower, at $60.1 million.
That was less than the $70 million or so that some financial analysts expected, based on the performance of Pixar's last two films, "The Incredibles and "Finding Nemo."
The "Cars" opening was more closely watched because it was seen partly as an indication of how the expensive deal Disney made to acquire Pixar would play out.
"We think the expectations for 'Cars' were heightened by Disney's acquisition of Pixar, and that investors could perceive the film's performance as an early indicator of the benefits of the purchase," Vijay Jayant, an analyst with Lehman Brothers, wrote Monday.
Jayant kept his $31 price target and "Equal Weight" rating.
Jason Bazinet, an analyst at Citigroup, downgraded Disney's stock from a "buy" to "hold" late Friday, but said his decision had nothing to do with the performance of "Cars."
Disney's stock recently hit a 52-week high of $30.62. Bazinet thinks the stock could go as high as $32 over the next 12 months, but said Disney might have trouble meeting ambitious earnings projections in 2007.
As far as "Cars" goes, Bazinet said Monday he still expects the film to earn as much as $650 million worldwide.
Analyst David Miller of the brokerage firm Sanders Morris Harris also did not change his estimate of $600 million worldwide, despite the fact that "Cars" opened lower than the $75 million to $80 million he had expected.