Topeka Reiterates Buy on Lions Gate (LGF); Divergent Opens at $56M Despite Reviews
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Rating Summary:
11 Buy, 9 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 12 | New: 1
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Topeka Capital reiterated a Buy rating on Lions Gate (NYSE: LGF) with a price target of $40.00. Comments follow the opening of its latest film, Divergent, which took in $56 million despite less-than-stellar reviews.
Analyst David W. Miller said, "Over the weekend, LGF's latest entry into the young adult film genre Divergent cleared $56.0mm on 5,904 screens, edging the formal prediction we issued in writing 2 weeks ago of $54.0mm (see our note dated March 6), and easily clearing the $50.0mm level which had been suggested by a weak Thursday night showing of a mere $4.7mm. The opening was also the second best thus far for 2014 behind The Lego Movie. That said, the opening was below the $60-64mm level which had been suggested as of Wednesday and Thursday given a screen count which had risen by roughly 375 over the past 2 weeks."
Miller continued, "While the $56.0mm number did not match that of Twilight 1 ($69.6mm), it never had to for LGF to go ahead and green light production on Insurgent, the second in the triumvirate of best-selling novels, and a film which actually already has a release date (3/20/15). We also want to kindly remind investors that it's not "how you start" which necessarily matters, but "how you finish", and with an "A" Cinemascore coming out of the weekend, we feel very comfortable with our GBO ultimate which we currently have modeled at $185.0mm in DBO. We also want to kindly remind investors that, because LGF has pre-sold distribution rights to Divergent in many foreign territories, how this film does domestically matters a lot more than how it does globally, though as with the Hunger Games franchise, LGF will accumulate overages on those territories if the film hits previously-negotiated box office levels."
For an analyst ratings summary and ratings history on Lions Gate click here. For more ratings news on Lions Gate click here.
Shares of Lions Gate closed at $27.60 yesterday.
Analyst David W. Miller said, "Over the weekend, LGF's latest entry into the young adult film genre Divergent cleared $56.0mm on 5,904 screens, edging the formal prediction we issued in writing 2 weeks ago of $54.0mm (see our note dated March 6), and easily clearing the $50.0mm level which had been suggested by a weak Thursday night showing of a mere $4.7mm. The opening was also the second best thus far for 2014 behind The Lego Movie. That said, the opening was below the $60-64mm level which had been suggested as of Wednesday and Thursday given a screen count which had risen by roughly 375 over the past 2 weeks."
Miller continued, "While the $56.0mm number did not match that of Twilight 1 ($69.6mm), it never had to for LGF to go ahead and green light production on Insurgent, the second in the triumvirate of best-selling novels, and a film which actually already has a release date (3/20/15). We also want to kindly remind investors that it's not "how you start" which necessarily matters, but "how you finish", and with an "A" Cinemascore coming out of the weekend, we feel very comfortable with our GBO ultimate which we currently have modeled at $185.0mm in DBO. We also want to kindly remind investors that, because LGF has pre-sold distribution rights to Divergent in many foreign territories, how this film does domestically matters a lot more than how it does globally, though as with the Hunger Games franchise, LGF will accumulate overages on those territories if the film hits previously-negotiated box office levels."
For an analyst ratings summary and ratings history on Lions Gate click here. For more ratings news on Lions Gate click here.
Shares of Lions Gate closed at $27.60 yesterday.
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