Shares of Lionsgate have hit at an all-time high in the first session of 2013 in the wake of an analyst raising his price target, gains in the media sector following the “fiscal cliff” deal and strong box office for “The Twilight Saga: Breaking Dawn — Part 2”
Lionsgate gained 3%, rising 48 cents to $16.88 in trading Wednesday on the New York Stock Exchange with the price hitting $17.08 at one point.
Analyst David Miller of B. Riley Caris increased his price target from $18.00 to $21.00, reaffirming his “buy” rating. Miller said the company’s projection last May of $900 million of cash-flow growth over the next three fiscal years will be $257 million the current year, followed by $302 million and $346 million.
Miller said the 2015 fiscal year will be particularly strong because the series “Anger Management,” which airs on FX, will finally head into the domestic syndication window in summer 2014. He also said “Catching Fire” and “Mockingjay Part 1” will perform much better
internationally than “The Hunger Games.”
“First ‘Hunger Games’ book sales internationally have increased substantially since the first ‘Hunger Games’ film was released,” he said. “Second, international box office typically grows at a faster rate during the life of a franchise than domestic box office.”
The gain in the stock eclipsed the previous high of $16.86 on Nov. 29 — and is nearly double the $8.60 price for the shares on Jan. 13, when Lionsgate bought Summit Entertainment for $412.5 million.
The final “Twilight” film has hit $800 million in worldwide grosses in less than two months — nearly $100 million above “Breaking Dawn — Part 1” — with $286.5 million at the domestic B.O and another $514 million internationally. Top foreign markets are the U.K. at $55.6 million, Brazil at $47 million, Russia at $42 million and France at $36 million.
Several Wall Street analysts raised their price targets on Lionsgate following the release of the final “Twilight” film, citing such factors as Lionsgate’s young-adult franchises, predictable earnings growth with lower P&A costs, the deleveraging of the balance sheet from $1.1 billion this year to $230 million by March 2015 and the possibility of a small dividend.
Thanks largely to “Breaking Dawn — Part 2” and “The Hunger Games,” Lionsgate crossed the $1 billion mark in 2012 at both the domestic and foreign box office.