Shares rise 25 cents due to 'quiet revolution'
NEW YORK — MGM Inc.’s shares stole higher Monday in a soft stock market as one Wall Street analyst recommended the stock as a “strong buy,” a rating the beleaguered studio probably hasn’t seen in a quite some time.
According to Stewart Halpern of ING Baring Furman Selz, a “quiet revolution” led by MGM’s new management team of chairman and CEO Alex Yemenidjian and vice chairman Chris McGurk will start to attract greater attention and strong favorable reviews starting today — when the company will announce quarterly earnings and host a conference call with investors.
MGM shares rose 25¢ to close at $20.36. Halpern raised his year-end price target to $26.
The call, Halpern said, will help convince the market that management has viable plans to improve the company’s long-term financial results. He also praised MGM’s hefty film library and the prospect of increased liquidity through an equity financing this fall.
MGM, owned by billionaire investor Kirk Kerkorian, has already warned the Street to expect $225 million of restructuring charges and film writedowns in the quarter, resulting in a loss of $1.66 a share. But the company has also outlined an eight-point plan to expand cash flow from its library, improve the performance of new theatrical releases, develop MGM movie channels around the world and number of other projects.