Wells Fargo analyst Omar Mejias has reiterated their bullish stance on LION stock, giving a Buy rating on July 28.
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Omar Mejias has given his Buy rating due to a combination of factors including Lionsgate Studios’ better-than-expected financial performance and strategic positioning in the industry. The company’s F1Q results surpassed expectations, driven primarily by strong performance in its TV segment, which indicates a positive trajectory for future earnings. Mejias highlights the strategic value of Lionsgate as a pure-play studio asset, which is poised to benefit from potential mergers and acquisitions as companies seek to expand their content portfolios.
Moreover, the anticipation of a robust film slate in F27, featuring major releases like ‘The Hunger Games’ and ‘The Resurrection of the Christ,’ is expected to significantly boost Lionsgate’s box office revenues. The potential for increased profitability in the TV segment due to more episodic deliveries further supports the Buy rating. Additionally, the possibility of an asset sale to reduce leverage and improve the balance sheet presents a strategic opportunity for Lionsgate to strengthen its financial position, making it an attractive investment option.
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.