Dreamworks shares rise on analyst upgrade

LOS ANGELES (Reuters) - Shares of DreamWorks Animation SKG Inc. DWA.N rose as much as 5 percent on Thursday after Pali Capital analyst Richard Greenfield upgraded the stock to a buy from a sell rating.

"Our renewed enthusiasm for DreamWorks shares is based on our belief that DreamWorks will have greater success and consistency to their feature film release schedule over the next couple of years -- in others words, DreamWorks' 'batting average' should notably improve," Greenfield said in a note.

The company's stock rose as high as $30.38, before trading up $1.10, or 3.8 percent, at $29.92 on the New York Stock Exchange early Thursday afternoon.

Greenfield said issues like a softening DVD market, costly theatrical releases and forecasting mistakes have weighed on DreamWorks shares, but said he believes DreamWorks can earn $1.50 per share on average each year from 2007 to 2010, compared to the 56 cents per share average over the past couple of years.