Lions Gate Entertainment: Starz, Lionsgate Studios Split Should Unlock Value

The separation of Lions Gate Entertainment Corp's LGF Starz and Lionsgate Studios businesses "looks set to shortly follow a shareholder vote on April 23," according to JPMorgan.

Lions Gate Entertainment Analyst: Analyst David Karnovsky upgraded the rating from Underweight to Neutral while raising the price target from $8 to $9.

The Lions Gate Entertainment Thesis: The split between the two businesses will likely present opportunities for creation "and at the very least eliminates an unfavorable structure for investors that drove part of our prior negative view," Karnovsky said in the upgrade note.

Check out other analyst stock ratings.

While the separation is a sound decision, there could be execution risk across the segments, he added.

"Regarding Starz, we're incrementally positive on the asset after a full court press from management explaining the medium-term outlook, though continue to have long-term concerns given the competitiveness of the streaming market," the analyst wrote.

Meanwhile, Lionsgate's Motion Pictures segment, which has been through a tough phase, should perform better in fiscal year 2026, he stated.

LGF.A Price Action: Shares of Lions Gate Entertainment had risen by 0.65% to $7.76 at the time of publication on Monday.

Read More:  Hasbro Focuses On Adult Toy Market Amid Declining Sales: Report

Photo: Shutterstock