DreamWorks Animation’s market value appreciated about $300 million to $2.2 billion as its share price rose 16% in early afternoon trading after Deadline disclosed that the independent studio is engaged in merger talks with Hasbro. The DWA price, at $25.95, is still well below the $35 that CEO Jeff Katzenberg is seeking. That suggests people believe something is going on, but aren’t convinced that the companies will reach an agreement — or, if they do, that it be for less than Katzenberg’s price. Meanwhile, Hasbro shares are down about 4.8% as investors fear that it might overpay for the studio.

Jeffrey KatzenbergAnalysts are mixed about the merits of a deal, and many are weary of talk about DreamWorks Animation after its negotiations with Softbank appeared to fizzle.

“Although a potential tie-up between a toy manufacturer and a movie studio may not be the most oft considered scenario, we do see some opportunities for two to effectively work together through both consumer product line development and the use of some of Hasbro’s brands/franchises in future movies (those that have not already been licensed by other studios),” B. Riley & Co’s Eric Wold says.

how-to-train-your-dragon-2-trailerStifel’s Benjamin Mogil says a DreamWorks-Hasbro deal would be “theoretically very positive” for the studio but adds that he’s “cautious as we have seen these rumors come and go.” He also notes that Hasbro would face some obstacles: “Certain brands, such as Trolls, are likely attractive to Hasbro, but [DreamWorks’] IP generation remains largely tied to its feature film slate, a risk Hasbro would effectively be embracing. Even How To Train Your Dragon 2, a successful film, will generate only around $60M in license revenue, or roughly $400M in retail sales.”

Sterne Agee’s Vasilly Karasyov says that he “can’t argue that something will not happen in the future.” But the stock picker – who gives DreamWorks Animation the equivalent of a “sell” rating – says that “there is no industrial logic” to a deal. “We don’t see a plausible argument for why [Hasbro] would pay 41% of its current market capitalization for company which, according to its CEO, is facing serious challenges.”

MKM Partners’ Eric Handler, who follows Hasbro, says it “makes no sense to us at all” for the toy company to proceed with its talks. DWA “has tried to sell itself for years now with no success.” And Hasbro does a lot of business with Disney properties including Marvel releases and Star Wars, and will add the Disney Princess line in 2016. If it acquired DreamWorks Animation then it “would result in Hasbro directly competing with Disney and a very high profile manner, which is likely to raise a number of red flags.”