Lionsgate Studios (LION) has received a new Buy rating, initiated by Wells Fargo analyst, Omar Mejias.
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Omar Mejias has given his Buy rating due to a combination of factors that highlight Lionsgate Studios as an appealing investment opportunity. The company is seen as a valuable pure-play studio asset poised to benefit from mergers and acquisitions within the industry, as strategic buyers aim to enhance their content portfolios. Despite some risks, the potential rewards are significant, with a bullish scenario projecting a stock price of $13 per share.
Furthermore, Lionsgate’s future prospects are supported by an improved film slate for fiscal year 2027, which is expected to generate substantial box office revenue. While the current slate has been underwhelming, the anticipated performance of upcoming tentpole films like “Michael” and “Hunger Games” offers a positive outlook. Mejias believes that the upside potential outweighs the risks, with the possibility of increased valuation driven by either successful M&A activity or strong slate performance, justifying the Buy rating.
Mejias covers the Communication Services sector, focusing on stocks such as Cinemark Holdings, IMAX, and Warner Music Group. According to TipRanks, Mejias has an average return of 6.4% and a 50.00% success rate on recommended stocks.
In another report released on July 28, Benchmark Co. also initiated coverage with a Buy rating on the stock with a $8.50 price target.