RBC restarts Lions Gate at Outperform on Starz, M&A prospects

|About: Lions Gate Entertainment C... (LGF.A)|By:, SA News Editor

Lions Gate Entertainment is seeing choppy trade (LGF.A +0.2%, LGF.B flat) after a reinstatement at Outperform by RBC Capital.

Strong results at Starz paced the company's strong earnings this quarter, and the "improved Starz outlook is the first step to LGF regaining some M&A premium," writes analyst Steven Cahall. It's the right time to be a "smidcap studio," he says; "There’s a content arms race on and LGF would give a bigger studio or content platform additional tools to create high-production-value movies and series." (h/t Bloomberg)

Despite the Outperform rating, he's trimmed the price target to $26 due to market volatility. That implies 31% upside from current pricing.

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