| 2019-11-08 12:17:58|
LGF.A, LGF.B… 12:17 11/08 11/08/19
Lionsgate jumps after upbeat Q2 results
Shares of Lionsgate (LGF.A, LGF.B) were on the rise after the company reported better-than-expected results for the second quarter. Following the report, several analysts maintained bullish views on the stock. EARNINGS: After the close on Thursday, Lionsgate reported Q2 adjusted earnings per share of 22c on revenue of $983.5M, compared to Bloomberg consensus estimates of 21c and $914.5M, respectively. Adjusted OIBDA for the quarter was $145M, up from the $128.8M the company reported for the same period last year. The company added that Starz domestic over-the-top subscribers grew a "record" 1.2M in Q2 to 5.6M, as Starz ended the quarter with 27M total global subscribers, up 1.8M from the prior year quarter. Commenting on the results, Chief Executive Officer Jon Feltheimer said that the "strong" quarter "showed solid performance in all of our key financial metrics." "Even as our industry is undergoing the most disruptive secular change in its history, all of our core businesses have staked out strong, sustainable and unique positions within the ecosystem and are performing very well," Feltheimer continued. JPMORGAN: Following the report, JPMorgan analyst Alexia Quadrani maintained an Overweight rating on Lionsgate but cut her price target to $14 from $15, noting that Starz continues to be in the midst of a "messy" negotiation with Comcast (CMCSA), and the company plans to heighten its marketing spend in the third quarter before the deal's expiration. Quadrani, who said the Comcast renewal continues to be an "overhang" on Lionsgate shares, noted that she is "positive" on the "strong" lineups for the Motion Pictures segment in the second half of 2020. BARRINGTON: Meanwhile, Barrington analyst James Goss backed an Outperform rating and $18 price target on Lionsgate, saying that execution of the company's strategy with Starz International and a sale of a share of the unit could allow for additional upside. The analyst added that various elements of speculation, including the potential value in a sale of Starz, potential consideration of additional purchase of library content, and the interest in considering a potential partial investment partner in Starz International highlight the focus of management in establishing and adding to Lionsgate's franchise and verifying those values. SUNTRUST: In addition, SunTrust analyst Matthew Thornton reiterated a Buy rating and $18 price target on Lionsgate, saying that the company reaffirmed full-year OIBDA guidance, excluding any changes that could arise from the ongoing Comcast carriage renewal. Thornton said that while the company had a "really good" quarter, it is now time to settle its deal with Comcast and "get a capital raise done." PRICE ACTION: In early afternoon trading, Lionsgate Class A shares were trading 12.2% higher at $9.33.
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