Market Overview

KeyBanc Pulls Back On Lions Gate Amid Lower Estimates, Poor Visibility

KeyBanc Pulls Back On Lions Gate Amid Lower Estimates, Poor Visibility
Bank Of America, Lions Gate, Twitter, XLF: 'Fast Money' Picks For October 10
Bernstein: Lionsgate Is David In A Sea Of Goliaths
Lions Gate's Q2: Beyond The Earnings Beat (Seeking Alpha)
Can Lions Gate Entertainment Stock Continue Upward Movement?
No No, Power Rangers? Sizing Up The Impact To Lions Gate If Ranger Reboot Goes Wrong
Lions Gate's Q2: Beyond The Earnings Beat (Seeking Alpha)

Lions Gate Entertainment Corporation Class A Voting (NYSE: LGF.A) (NYSE: LGF.B) is failing to captivate its audience. A few weeks after suffering a Morgan Stanley downgrade, the stock lost another fan.

The Rating

KeyBanc Capital Markets analyst Evan Wingren downgraded Lions Gate from Overweight to Sector Weight and did not issue a price target.

The Thesis

Wingren sees upside in Lionsgate’s buyout potential and international opportunities, but that’s about it.

“Although we think Lionsgate should continue to trade at a premium to ad-supported cable network peers, even accounting for this on lower estimates, we struggle to justify upside for a more positive view,” the analyst said in a Friday note.

Lionsgate's reduced guidance for 2018 and 2019 operating income before depreciation and amortization did little to convince him otherwise.

At the same time, the market has limited visibility on the firm’s shrinking and higher-cost film slate, and TV production is slowing.

Lionsgate is seen to suffer challenges in its Starz segment, which posts declining subscriptions and renewals despite being “better-positioned than ad-supported peers,” and investments in original content promise uncertain payoff as programming competition increases, Wingren said. 

Price Action

At the time of publication, Class A and B shares were trading down about 13 percent.

Related Links:

10 Paramount Films That Wouldn't Exist Without Major Financing

The Sundance Kids: MoviePass Unveils Strategy To Invest In Film, Launch Of MoviePass Ventures

Posted-In: Evan Wingren KeyBanc Capital MarketsAnalyst Color Downgrades Analyst Ratings Best of Benzinga


Related Articles (LGF.A + LGF.B)

View Comments and Join the Discussion!

Latest Ratings

ACBIKeefe Bruyette & WoodsUpgrades21.0
COTYBMO CapitalUpgrades12.0
VYGRRaymond JamesUpgrades0.0
ATNXJP MorganUpgrades15.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
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
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

2 Bank Stocks To Buy On The Dip, According To BMO

Monmouth Real Estate To Experience Slower External Growth, Says B Riley FBR