Ahead of the Bell: CEC Entertainment edges lower

Shares of CEC Entertainment Inc. edged lower in premarket trading Thursday after a KeyBanc analyst downgraded the operator of the Chuck E. Cheese pizza chain following a recent run-up in stock price.

The stock has nearly doubled in value since reaching a 52-week low of $19.81 in late January, but Lynne Collier said rising labor and food costs will pressure results at the Irving, Texas-based company. She reduced her rating to "Hold" from "Buy".

She added that the pizza and entertainment center's business typically slows in the second quarter.

Collier also said that the company is on track to remodel between 20 and 24 locations this year, and the same amount in 2009. She also thinks revenue is growing due to CEC's increased focus on birthday parties, along with advertising that targets mothers.

Shares of CEC Entertainment traded as high as $39.47 this week, within pennies of their 52-week high of $39.55 set last June. In premarket trading Thursday, the stock slipped 78 cents, or 2 percent, to $37.25.