Wunderlich Previews Lions Gate Q4 Earnings
Lions Gate Entertainment Corp. (USA) (NYSE: LGF) is scheduled to report its F4Q16 results after market close today. Wunderlich’s Matthew Harrigan maintains a Buy rating for the company, with a price target of $32. The analyst believes the stock is a “free play on new film production.”
Harrigan expects Lions Gate to record adj. EBITDA of $22.3 million, down significantly from the $90.4 million in F4Q15.
Results are likely to reflect a loss on "Gods of Egypt." Revenue is estimated to have grown 8.9 percent to $703.3 million, driven by strong TV sales, with a pre-adjustment EBITDA loss of $13.6 million. Harrigan expects Lions Gate to report a GAAP EPS loss of $0.15, versus a profit of $0.14 in the year-ago quarter. Adj. EPS is pegged at a loss of $0.05, down substantially from a profit of $0.39 reported for F4Q15.
Film Versus TV
The analyst mentioned expectations for:
- Film sales down 7.9 percent to $460.4 million
- Television top-line spike 66.5 percent to $242.9 million, driven by "Orange is the New Black"
- Theatrical sales up 10.4 percent to $88.3 million
- Home entertainment down 15.0 percent to $174.0 million
- Film related TV sales down 12.0 percent to $52.0 million
- International and Lions Gate U.K. top line down 7.0 percent to $138.8 million
Free Play On New Film Production
“The current share price implicitly discounts just 5 percent sustainable long-term box office share with new film production margin at breakeven, or a 7.5 percent loss margin after arbitrary assignment of all film overhead to new production. Apart from film, we retain high confidence in Lions Gates' TV growth profile, but admit that film has to be turned around to justify owning LGF stock,” Harrigan wrote.
Latest Ratings for LGF
|Sep 2016||Brean Capital||Initiates Coverage on||Buy|
|Aug 2016||Loop Capital||Initiates Coverage on||Buy|
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