Analyst Raises Lionsgate Stock Price Target, Cites 'Divergent's' YA 'Muscle'
TORONTO -- Never mind the shorts piling into Lionsgate.
Wunderlich Securities analyst Matthew Harrigan on Wednesday wrote in a report that tracking and "Fandango visibility" ahead of the mini studio's March 21 release of Divergent reduce "any plausibility for a box-office hard landing."
Tracking for Divergent, which stars Shailene Woodley and is directed by Neil Burger, indicates it could match, or exceed, the $69.6 million opening of Twilight in November 2008, according to the analyst.
As a result, he raised his price target on Lionsgate stock from $40 to $43 and maintained his "buy" rating.
Harrigan added Divergent is yet another YA movie franchise in the making for the indie studio.
"Divergent and its young stars Shailene Woodley and Theo James now appear likely to create a new three- to four-film YA franchise for LGF, even if the first movie may be somewhat U.S.-centric," he wrote.
Lionsgate is planning releases for Divergent sequels in March 2015 and March 2016, and has an option to split the last film into two releases.
Lionsgate's stock tends to rise ahead of major releases of its teen tentpole franchises like Twilight and Hunger Games before retreating once box office is reported.
Shares of the mini studio are up around 10 percent in March to $32.80 as of early morning trading Wednesday on the New York Stock Exchange, but down slightly from its Tuesday close of $32.94.