Analyst Matthew Harrigan of Benchmark Co. maintained a Buy rating on Starz Entertainment Corp, retaining the price target of $39.00.
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Matthew Harrigan has given his Buy rating due to a combination of factors including Starz Entertainment Corp’s strategic content initiatives and potential for future growth. Despite a challenging initial quarter post-separation from Lionsgate Studios, Starz is focusing on cost-effective content production and expanding its original programming, which is expected to drive future revenue growth. The company is leveraging its popular franchises, such as the Outlander prequel and new series like Fight Club, to attract diverse audiences and increase subscriber numbers.
Additionally, Starz is targeting a 20% adjusted OIBDA margin and aims to achieve significant cash flow conversion by 2026, which are critical financial goals that could enhance investor confidence. The company’s ability to deliver on its guidance for adjusted OIBDA and free cash flow conversion is seen as pivotal in addressing market skepticism. Harrigan’s $39 price target reflects a conservative valuation, contingent on Starz demonstrating improved financial performance and capitalizing on its content momentum.
Based on the recent corporate insider activity of 42 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 STRZ in relation to earlier this year.