Market Overview

Dismal 'Blair Witch' Opening Could Put A Scare Into Lions Gate Investors

Share:
Dismal 'Blair Witch' Opening Could Put A Scare Into Lions Gate Investors

B. Riley says the disappointing box office performance of "Blair Witch" could pressure the brokerage/consensus second quarter estimates of Lions Gate Entertainment Corp. (USA) (NYSE: LGF). However, B. Riley maintained its Buy rating on the stock as it remains bullish on the company's fundamentals.

"[W]e would use any weakness in LGF shares to add to positions as we still remain positive on the potential for upside EBITDA this year (consensus is at the midpoint of guidance and RILY is above consensus) as well as the benefits of the proposed Starz combination (that should drive impressive cash operating/tax synergies of $200MM+ annually)," analyst Eric Wold wrote in a note.

"Blair Witch" opened with a disappointing $9.7 million and a D+ CinemaScore, suggesting that the film is unlikely to reach the consensus box office estimate of $32.8 million (RILY was at $55.0 million).

Wold noted that unlike last year, Lions Gate film slate is diversified this year and isn't dependent on any one blockbuster film/franchise.

That said, analyst said there could be downward revisions to second quarter estimates in the coming weeks given the weak opening for Blair Witch coupled with lower-than-expected quarter-to-date results heading into this weekend.

Wold expects second quarter revenue of $593 million, which remains above the consensus estimate of $565 million.

At time of writing, shares of Lions Gate fell 3.84 percent to $20.76. Wold has a $34 price target on shares.

Image: lumangkalapatingmababaanglipad, Flickr

Latest Ratings for LGF

DateFirmActionFromTo
Dec 2016Initiates Coverage OnBuy
Nov 2016UpgradesSector PerformOutperform
Oct 2016Initiates Coverage OnOverweight

View More Analyst Ratings for LGF
View the Latest Analyst Ratings

Posted-In: B. Riley Blair Witch Eric WoldAnalyst Color News Price Target Reiteration Analyst Ratings Best of Benzinga

 

Related Articles (LGF)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
AXPOppenheimerMaintains159.0
SIVBMaxim GroupMaintains300.0
VIACMorgan StanleyReinstates42.0
APDBMO CapitalMaintains275.0
OIDeutsche BankMaintains15.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com