May 9, 2012 / 2:35 PM / 7 years ago

Disney at life-high on profit rise, Avengers success

The signage at the main gate of The Walt Disney Co. is pictured in Burbank, California, May 7, 2012. REUTERS/Fred Prouser

(Reuters) - Walt Disney Co’s (DIS.N) shares rose to a life-high after the company reported a rise in quarterly profit despite its science fiction film John Carter bombing, and announced a sequel to its hugely successful superhero flick, The Avengers.

Shares of the company rose as much as 3 percent to $45.80 on Wednesday morning on the New York Stock Exchange. They were later up more than 1.5 percent at $44.97.

RBC, Barclays and at least five other brokerages raised their price targets on the stock, citing the strong debut of The Avengers, which had the biggest weekend opening in film history, and the company’s announcement of a sequel on Tuesday.

Disney’s second-quarter profit was driven by strong attendance at its theme parks and higher advertising revenue at its cable networks, including ESPN.

The success of The Avengers has changed the company’s mixed track record, brought on by flops like Mars Needs Moms and John Carter, RBC Capital Markets analyst David Bank said in a note, raising his price target on the stock to $50 from $45.

Macquarie Equities Research analyst Tim Nollen said The Avengers more than makes up for the bombing of John Carter, with a $700 million global box office take already, and spawning several more films, consumer merchandise and character theme introductions at Disney’s theme parks.

Nollen raised his target on the stock to $50 from $45.

However, Susquehanna International Group analyst Vasily Karasyov said the success of The Avengers does not solve long-term challenges like the absence of a growing TV production revenue stream.

In April, Disney’s movie studio Chairman Rich Ross resigned under pressure after a less than three-year run that included the release of John Carter, one of the biggest flops in recent Hollywood history.

Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Joyjeet Das

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