×
You will be redirected back to your article in seconds

Lionsgate Stock Roars On Upgrade

'Hunger Games,' 'Divergent' cited in upgrade

Lionsgate stock keeps roaring, setting another all-time high thanks to more Wall Street bullishness over its TV business and its young-adult franchises, such as “The Hunger Games.”

The stock jumped 4% on Thursday, rising $1.11 to $27.66. The stock has nearly doubled in price this year and more than tripled its $8.60 price when Lionsgate acquired Summit for $412.5 million in January, 2012.

James March of Piper Jaffray boosted his price target to $32 from $27 and raised his EBITDA estimate to $104 million from $86 million for its fourth quarter ended March 31, citing “more confidence” in “Twilight” DVD sales and international box office, more “Anger Management” and “Nashville” episode deliveries, and revenue from Netflix related to season 5 of “Mad Men.”

“We continue to see plenty of momentum at Lionsgate, with a strong slate, improving television business and upside to our earnings forecasts,” Marsh added. “We think the key to the shares’ performance from here is demonstrating that the company can build off of its success with ‘Hunger Games’ and create and extend additional franchises.”

Marsh noted that two potential franchises (“Ender’s Game” and “Divergent”) are set for release in the next nine months and added that he’s comfortable that management will find a way to extend the ‘Twilight’ franchise.

“While Hunger Games’ success is seemingly baked into the shares to some, we see substantial upside driven by international box office and high margin merchandising opportunities,” he added.

Lionsgate announced at Cannes that it had generated $250 million in foreign sales at the market for nine upcoming films, including the final two movies in the “Hunger Games” franchise. Marsh said the disclosure indicates that Lionsgate is becoming equivalent in status to the other six Hollywood majors.

“We believe these deals represent long-term confidence in Lionsgate’s slate well into 2015, enabling it to capture 35% of its international box office (up from 20% previously) and bringing the company nearly in-line with major studios,” he noted.

“Ender’s Game” debuts Nov. 1 and “The Hunger Games: Catching Fire,” starring Jennifer Lawrence, opens a few weeks later on Nov. 22. “Divergent,” starring Shailene Woodley, opens March 21.

Lionsgate is set to release its next quarterly earnings report on May 30.

Popular on Variety

More Biz

  • Sully

    Georgia Attorney General Closes Probe of 'Sully' Tax Credits

    The Georgia attorney general’s office has closed a criminal investigation into Warner Bros.’ use of tax credits on the Clint Eastwood film “Sully,” after state revenue agents declined to pursue the case. The state prosecutor’s office opened a criminal probe two years ago, after a whistleblower alleged that the production had claimed more than $600,000 [...]

  • Spotify logo is presented on a

    Spotify VP Paul Vogel Talks Subscription Prices, Label Licenses, Podcasts

    The annual Goldman Sachs Communacopia Conference gives representatives from major companies the opportunity to present to the investment community, and Paul Vogel, Spotify’s VP and head of financial planning & analysis, treasury and investor relations, spoke on the streaming giant’s behalf on Tuesday morning. While many of his comments were statements frequently heard in the [...]

  • Women in Animation Logo

    WIA Partners With Animation Mentor, Toon Boom to Expand Scholarship Program

    Women in Animation has partnered with Animation Mentor and Toon Boom to expand the organization’s WIA Scholarship Program with workshops and software packages. WIA scholarships are given to animation students with a financial need and who demonstrate talent and passion for animation that will lead to a promising career in the field. The Animation Mentor [...]

  • Def Jam, Astralwerks Launch Label Divisions

    Def Jam, Astralwerks Launch Label Divisions in South East Asia

    Universal Music Group today announced what it calls a significant expansion of its recorded music operations across South East Asia with the launch of two new label divisions: Def Jam South East Asia, to focus on the hip-hop scene within the region, and Astralwerks Asia, a label “with a true focus on nurturing talent within Asia across [...]

  • Bob Bakish Viacom CEO

    ViacomCBS Leaders Talk NFL Negotiations, Streaming Wars and Merger Focus

    Viacom and CBS aim to prosper in the streaming arena by covering both ends of the marketplace, blending Viacom’s focus on ad-supported platforms with CBS’ strong head start on subscribers for CBS All Access and Showtime. ViacomCBS CEO Bob Bakish and incoming ViacomCBS chief financial officer Christina Spade outlined the combined company’s vision for how [...]

  • Spotify

    Spotify Dismisses Amazon’s High-Definition Audio: ‘It’s Not a Big Differentiator’

    At the moment Amazon Music launched its new high-definition audio service on Tuesday morning, which it says offers the best streaming audio fidelity available, Spotify VP and head of investor relations Paul Vogel was speaking at Goldman Sachs’ Communicopia conference in Lower Manhattan. While Tidal and Deezer have long offered a high-fidelity service and Apple [...]

  • Randall Stephenson

    AT&T CEO Defends WarnerMedia Strategy, Addresses Activist Investor's Letter

    AT&T chairman and CEO Randall Stephenson defended the $85 billion deal for Time Warner as the right strategy for the company in response to criticism from an activist investor. Consumers are watching more content and more of that viewing is digital, so combining a telecommunications company like AT&T with a content powerhouse like WarnerMedia is [...]

More From Our Brands

Access exclusive content