Lionsgate Studios price target lowered to $8 from $9 at Morgan Stanley
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 06 2024
0mins
Should l Buy LION?
Price Target Adjustment: Morgan Stanley has reduced its price target for Lionsgate Studios (LION) from $9 to $8 while maintaining an Overweight rating, citing a 10% decrease in OIBDA estimates for FY25-27 due to box office underperformance.
Separation Timeline: The planned separation of Lionsgate is on track for the end of 2024, which is viewed as a significant catalyst for enhancing the value of the Studio.
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Analyst Views on LION
Wall Street analysts forecast LION stock price to fall
5 Analyst Rating
4 Buy
1 Hold
0 Sell
Strong Buy
Current: 12.380
Low
8.00
Averages
9.30
High
11.00
Current: 12.380
Low
8.00
Averages
9.30
High
11.00
About LION
Lionsgate Studios Corp. is a pure play content company. The Company brings together diversified motion picture and television production and distribution businesses, a portfolio of brands and franchises, a talent management and production house and a more than 20,000-title film and television library. The Company's Motion Picture segment consists of the development and production of feature films, acquisition of North American and worldwide distribution rights, North American theatrical, home entertainment and television distribution of feature films produced and acquired, and worldwide licensing of distribution rights to feature films produced and acquired. Its Television Production segment consists of the development, production and worldwide distribution of television productions, including television series, television movies and miniseries, and non-fiction programming. Television Production segment also includes the operations of 3 Arts Entertainment, a talent management company.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Earnings Release Schedule: Lionsgate has announced that it will release its fourth quarter and full year financial results for the fiscal year ending March 31, 2026, after market close on May 21, indicating the company's commitment to transparency and investor communication.
- Investor Conference Call: Senior management will hold an analyst and investor conference call on the same day at 5:00 PM ET (2:00 PM PT) to discuss the financial results in detail, aiming to bolster investor confidence.
- Live Webcast Availability: Interested investors can listen to the live webcast via the events page on Lionsgate's investor relations website, demonstrating the company's efforts in digital communication to enhance engagement with investors.
- Replay Service: A full replay will be available starting the evening of May 21 through the same link, ensuring that all stakeholders can access key information in a timely manner, further enhancing information transparency.
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- Impressive International Revenue: The film also excelled internationally, grossing $120.4 million, bringing its estimated global opening total to $217.4 million, which provides substantial returns for the producers.
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- Earnings Release Schedule: Lionsgate has announced that it will release its fourth quarter and full year financial results for the fiscal year ending March 31, 2026, after market close on May 21, indicating the company's commitment to transparency and investor communication.
- Investor Conference Call: Senior management will hold an analyst and investor conference call on the same day at 5:00 PM ET (2:00 PM PT) to discuss the financial results in detail, aiming to bolster investor confidence.
- Live Webcast Availability: Interested investors can listen to the live webcast via the events page on Lionsgate's investor relations website, demonstrating the company's efforts in digital communication to enhance engagement with investors.
- Replay Service: A full replay will be available starting the evening of May 21 through the same link, ensuring that all stakeholders can access key information in a timely manner, further enhancing information transparency.
See More
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New Target Price: The target price has been increased from $11 to $14.
See More
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- Howdy Channel Success: Roku's paid streaming channel Howdy, launched last August, has attracted over 1 million subscribers, demonstrating its appeal among price-sensitive customers and is expected to further boost company revenue.
- Improved Retention Rates: Howdy's user retention rate stands at 51%, significantly above the industry average of 47%, indicating Roku's success in user experience and content appeal, thereby enhancing its competitive position in the market.
- Strong Roku Channel Performance: By 2025, The Roku Channel captured a 3% share of total TV viewership, ranking in the top ten and surpassing competitors like Paramount+ and Peacock, showcasing its robust position in the ad-supported streaming market.
- Optimistic Financial Outlook: Roku anticipates an 18% year-over-year revenue increase to $1.2 billion in Q1, with a projected net profit of $50 million, marking the fourth consecutive profitable quarter if achieved, thereby reinforcing confidence in the company's recovery.
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- Box Office Breakthrough: Lionsgate's new film, 'Michael,' generated $217 million in global sales during its opening weekend, with $97 million domestically and $120.4 million internationally, significantly exceeding pre-release expectations of $50 million to $70 million, showcasing strong market demand and brand impact.
- Stock Price Surge: Lionsgate's stock rose for the third consecutive day, climbing 7.09% to close at $12.24 on Monday, primarily driven by the film's success and a 25% price target upgrade from an investment firm, reflecting market confidence in the company's future growth.
- Target Price Increase: Benchmark raised Lionsgate's price target from $12 to $15, indicating a 22.5% upside potential from its latest closing price while maintaining a 'buy' recommendation, further bolstering investor optimism.
- Executive Incentive Plan: Lionsgate updated CEO Jon Feltheimer's employment contract, granting him an option to purchase 4.5 million shares at $11.07 each and the opportunity to receive 666,667 restricted stock units upon meeting specific conditions, aimed at supporting his strategy for driving the company's growth.
See More
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- Memory Stocks Rise: Memory stocks like Sandisk and Micron surged as Melius Research highlighted sustained demand from the AI cycle, with Micron shares up 5% and Sandisk over 7%, indicating increased investor confidence and expected strong growth in the coming years.
- Strong Box Office Performance: Lionsgate Studios' film 'Michael' achieved $97 million in U.S. ticket sales and $217 million globally in its opening weekend, exceeding expectations by $30 million and becoming the highest-grossing biographical film, driving the stock up around 4% and reflecting strong market demand for quality content.
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See More
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- Strong Opening Performance: Lionsgate's 'Michael' achieved a remarkable $97 million in its domestic opening weekend, marking one of the strongest launches of the year and demonstrating a robust demand for culturally significant films, significantly boosting theater confidence.
- Impressive International Revenue: The film also excelled internationally, grossing $120.4 million, bringing its estimated global opening total to $217.4 million, which provides substantial returns for the producers.
- Significant Market Impact: 'Michael' accounted for nearly two-thirds of the total $146.96 million generated by the top ten films, indicating its powerful influence on the overall market and reminding Hollywood that audiences are willing to pay for cultural events.
- Competitor Performance: While Universal's 'The Super Mario Galaxy Movie' secured second place with $21.2 million, its total gross has reached $386.5 million, highlighting the continued appeal and profitability of family films in the current market landscape.
See More
