The stock closed down 12.2%, to $17.26, after analysts piled on the production company for its soft year-end results, a warning that costs in 2012 will be higher than expected, and broad concerns about the market for animated films. “Although the studio can control the quality and genre of its movies, it cannot prevent competition in the crowded animation space, or combat 3D fatigue and lofty ticket prices,” says Wedbush Securities analyst Michael Pachter. Janney Capital Markets’ Tony Wible says that DreamWorks Animation’s prospects “look more challenging” in 2012 because it will release just two films instead of three and it’s “seeing weaker performance on the 2011 carry-over films” — Puss In Boots and Kung Fu Panda 2. Wible lowered his 2012 earnings per share forecast 11.2% to 95 cents, and says the stock is only worth about $13. Susquehanna Financial Group’s Vasily Karasyov is more optimistic — he has a target stock price of $18. But he was jarred by the company’s spending plans to upgrade its production infrastructure, and the talent costs for the upcoming Madagascar 3, which the company says will be $20M higher than they were for the original film. “These largely offset potential benefits of a proven property,” he says. What about DWA’s new joint venture to release films in China? Since the first picture in that deal isn’t due to be released until 2016, “we believe the JV is unlikely to have a material impact on DreamWorks’ earnings near term,” says Barclays Capital’s Anthony DiClemente.