Shares of media and entertainment company Lions Gate Entertainment Corp. were upgraded to buy from hold on Friday by analysts at SunTrust. Lead analyst Matthew Thornton said the company's "2018 guidance overhang has been removed with operating income before depreciation and amortization, film and TV expectations reset and looking attainable." Thornton sees positives in Lions Gate's 2018 film slate, with the release of "The Hitman's Bodyguard" and "Wonder," and he believes the studio has franchise potential with 2019 release "Chaos Walking" and the "Kingkiller Chronicles." Starz, which Lions Gate acquired last year for $4.4 billion, is set to release its number one show "Power" in June and number two show "Outlander" in September. According to Apptopia the Starz app showed solid growth through May and its number one show has yet to drop. In Thornton's view, Starz is Lions Gate's key valuation driver. He also said that with it's more than $500 million high-margin library revenue, Lions Gate could be an acquisition target. Shares of Lions Gate were inactive in premarket trade on Friday but are up more than 3% in the year to date and 19% in the trailing 12-month period. By comparison, the S&P 500 index is up close to 9% in the year and more than 15% in the last 12 months.
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