Wunderlich Reiterates Buy, Raises Price Target On Lions Gate Entertainment As 'Mockingjay' Opens Well In China

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In a report published Monday, Wunderlich Securities analyst Matthew Harrigan reiterated a Buy rating on
Lions Gate Entertainment Corp.LGF
, and raised the price target from $37.00 to $40.00. In the report, Wunderlich Securities noted, "We are increasing our price target on Buy-rated Lionsgate (LGF) to $40 from $37, largely off higher confidence following Friday's conference call on no earnings dive after the final Mockingjay. We are particularly excited about Lionsgate's momentum in East Asia, including its advanced discussions with Hunan and its streaming partnership with Alibaba Group (BABA-NR). We expect a nice catalyst next month from improved global box office performance for Insurgent. We estimate that the stock is now priced for delivering just $950mm in 3-year forward EBITDA as a post Hunger Games baseline vs. $1.2-1.3bn guidance. We base our valuation off a free cash flow model linked to the S&P 500 and assume that Lionsgate can achieve long-term organic LT that is 30% faster than the SPX (3.3% vs. 2.5%)." Lions Gate Entertainment closed on Friday at $29.10.
Posted In: Analyst ColorPrice TargetAnalyst RatingsMatthew HarriganWunderlich Securities
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