Jefferies Thinks Lions Gate’s Stock is Going to Recover

By Austin Angelo

In a report released yesterday, John Janedis from Jefferies reiterated a Buy rating on Lions Gate (NYSE: LGF), with a price target of $26. The company’s shares closed yesterday at $19.01, close to its 52-week low of $16.21.

Janedis observed:

“LGF’s F2Q EBITDA came in at $3M, better than our ($15M), likely helped by timing of TV deliveries, with the movie shortfalls weighing on F3Q. We are lowering F3Q EBITDA to $59M (prior $90M), but are leaving the yr largely unch ($212M vs. prior $208M). The deal is on track to close in Dec. We expect the focus to shift to PF FCF, which should drive LGF shares higher. F2Q EBITDA Ahead of Expectations. LGF reported F2Q EBITDA of $3M, ahead of our ($15M) estimate, with the upside largely in film. We think this upside is largely due to timing – and will impact F3Q results (mainly due to weaker than expected B.O.”

According to TipRanks.com, Janedis is a 4-star analyst with an average return of 2.6% and a 46.4% success rate. Janedis covers the Services sector, focusing on stocks such as Interpublic Group of Companies, Live Nation Entertainment, and Madison Square Garden Co.

Currently, the analyst consensus on Lions Gate is Strong Buy and the average price target is $28.88, representing a 51.9% upside.

In a report issued on October 28, Stifel Nicolaus also upgraded the stock to Buy with a $26 price target.

The company has a one year high of $41.41 and a one year low of $16.21. Currently, Lions Gate has an average volume of 2.45M.

Based on the recent corporate insider activity of 63 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of LGF in relation to earlier this year. Last month, Arthur Evrensel, a Director at LGF bought 2,600 shares for a total of $48,360.

Lions Gate Entertainment Corp. engages in motion picture production and distribution, television programming and syndication, home entertainment, family entertainment, digital distribution, new channel platforms and international distribution and sales. It operates through the Motion Pictures and Television Production segments. The Motion Pictures segment consists of the development and production of feature films, acquisition of North American and worldwide distribution rights, North American theatrical, home entertainment and television distribution of feature films produced and acquired, and worldwide licensing of distribution rights to feature films produced and acquired. It is composed of two sub segments: Production and Distribution. The Production segment includes financing motion pictures, as well as the development of a screenplay, the actual filming activities and post-filming editing and post-production process. The Distribution segment distributes motion pictures directly to United States movie theatres. The Television Production segment involves in the development, production and worldwide distribution of television productions, including television series, television movies and mini-series and non-fiction programming. The company was founded by Frank Guistra on April 28, 1997 and is headquartered in Santa Monica, CA.