Morgan Stanley analyst Thomas Yeh has maintained their bullish stance on LION stock, giving a Buy rating on October 29.
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Thomas Yeh has given his Buy rating due to a combination of factors that highlight Lionsgate Studios’ potential for growth and profitability. The company is in a phase of rebuilding its film and TV pipeline, which is expected to lead to normalized earnings by FY27. The outlook for a double-digit EBITDA compound annual growth rate remains strong, with a projected 15% upside to the price target of $8. Additionally, the strategic optionality of the company’s film and TV projects supports this positive outlook.
Recent renewals of major TV series and a robust slate of upcoming films, such as ‘Now You See Me 3’ and ‘The Housemaid,’ bolster confidence in Lionsgate’s growth prospects for FY27 and FY28. While there are inherent risks in predicting theatrical success, the potential for post-theatrical monetization appears promising. The scarcity value of Lionsgate’s film intellectual property supports a premium multiple on shares, positioning the company for potential share outperformance. Despite industry consolidation risks, the demand for premium content by competing streamers remains strong, further enhancing Lionsgate’s strategic position.
In another report released on October 29, Barrington also initiated coverage with a Buy rating on the stock with a $8.50 price target.