Hit Disney Film 'Brave' Is a Disappointment to Some on Wall Street

2012-22 REV Brave H

Merida, wonderfully voiced by Kelly Macdonald, is pop culture's latest precocious archer.

The Pixar movie opened at No. 1 with $66.7 million, but shares of Disney -- which bought the studio for $7.4 billion in 2006 -- dropped 1.6 percent Monday.

Pixar’s Brave opened No. 1 at a very respectable $66.7 million domestically this weekend, but some Disney investors and analysts weren’t impressed.

On Monday, Disney shares dropped 1.6 percent, mirroring the overall action on Wall Street, and some analysts moaned that Brave actually might be a disappointment, despite its status as a bona fide hit film.

STORY: Box Office Report: 'Brave' Hits Bull's-eye With $66.7 Mil; 'Abraham Lincoln' Soft With $16.5 Mil 

Leading the somewhat negative charge was Doug Creutz of Cowen & Co, who told clients on Monday: “While this was a fine performance in our view and assures Pixar of releasing another profitable film, we remain concerned that the creative direction of Pixar may be wobbling as Brave is now the second consecutive film to receive less-than-rave reviews.”

Brave earned a 75 percent at Rotten Tomatoes while its predecessor, Cars 2, earned a dismal 38 percent. Creutz notes that only three of Pixar’s 13 films have scored below 90 percent at Rotten Tomatoes, the original Cars in 2006 being the third.

Disney paid $7.4 billion for Pixar in 2006, and Creutz saw fit on Monday to revisit that decision in light of Brave and Cars 2.

“Given the price Disney paid for Pixar, and the importance of Pixar as an engine of creative content for the company, we take the risk of erosion of Pixar’s creative greatness very seriously,” he wrote on Monday.

Creutz reiterated his “neutral” rating on Disney stock, which fell 77 cents Monday to $46.70.

“While it may be easy to write off Cars 2 as a toy marketing campaign gone wrong, the fact that Pixar has released a creatively average original film is of incrementally more concern,” Creutz wrote.

Eric Handler at MKM Partners noted that Brave "under-indexed" with 3D, which accounted for only 34 percent of revenue compared with an average of about 50 percent for the past 10 3D family films in their opening weekends.

On the bright side, Handler noted that Brave received an “A” score at CinemaScore, “which bodes well for the film’s legs over the next few weeks.”

One of the more bullish analysts was Barton Crockett of Lazard Capital Markets, though on Monday even he wrote that Brave "missed our ambitious outlook." 

Crockett predicts a $254 million domestic run for Brave, roughly in line with Monsters, Inc. in 2001. He figures Brave will lead the box office next weekend with $38.6 million, about $6.3 million ahead of Universal’s Ted, which he thinks will open in second place. In 2011, Cars 2 earned just $26.3 million in its second weekend on the way to a total domestic haul of $191 million.

Crockett rates Disney a “buy” and has a $53 price target on the stock.