While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of DreamWorks Animation Skg Inc (NASDAQ:DWA) sank 4% today after Topeka Capital downgraded the animated-movie house from hold to sell.

So what: Along with the downgrade, analyst David Miller lowered his price target to $22 (from $27), representing about 22% worth of downside to yesterday's close. So, while contrarian traders might be attracted to DreamWorks' price slump in recent months, Miller's call could reflect a growing sense on Wall Street that its near-term risks are still being underestimated by investors.

Now what: According to Topeka, DreamWorks' Q1 results next week are likely to disappoint. "We believe there is a very good chance DWA may recognize a substantial writedown on its current theatrical release Mr. Peabody & Sherman to the tune of $34.5mm, or $0.26/share in after-tax effects," said Miller. "If we are right, then that would be 3 of the last 4 films which have resulted in writedowns for DWA." Of course, with DreamWorks shares still off about 25% from its 52-week highs and sporting a cheapish PEG of 0.50, those short-term concerns might be providing patient Fools with a juicy long-term opportunity. 

Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends DreamWorks Animation. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.