DreamWorks Animation reaches 52-week high

Shares of DreamWorks Animation SKG Inc. reached a new 52-week high Friday after Goldman Sachs analyst Anthony Noto lifted his rating to "buy" from "neutral," citing four upcoming movies from the studio.

In New York Stock Exchange trading, DreamWorks shares traded as high as $31, breaking the previous year record of $30.50 set in January. Shares jumped $1.10 (3.7%) Friday morning to $30.70.

Noto raised his price target by $8 to $36. In a client note, he said that the May release of Shrek the Third should begin to bode well for DreamWorks.

The animation studio plans to release Bee Movie in November, while Kung Fu Panda and Madagascar 2 are scheduled for release in 2008.

"2007 is the first year since DreamWorks' IPO [initial public offering] that it is executing on its strategy to release in one year an original film along with a sequel, which provides higher odds of success theatrically and the ability to drive greater home video catalog revenue," Noto wrote in a client note.

Noto also predicts better international box office for DreamWorks, with its next four films participating in a new marketing and promotional agreement with McDonald's. The partnership with the Golden Arches -- unlike an earlier Burger King deal -- gives Dreamworks a larger global reach, says Noto. He says that McDonald's has over five times more locations in Europe and Asia and about twice as many in the United States as Burger King.

Other possibilities for increased revenues are 3D film animation advancements, a potential rise in home video sales due to a new high-definition format, and a recently announced $150 million stock buyback.