Analyst Upgrades Lionsgate, Citing 'The Hunger Games'

NEW YORK - Miller Tabak analyst David Joyce on Tuesday upgraded his recommendation on shares of Lionsgate to "buy" from "neutral," citing the upcoming release of The Hunger Games.

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"The stock has come off recent December lows around $8, and we think investor enthusiasm for the late-March theatrical release of The Hunger Games, which could generate more than $170 million at the North American box office, should help the shares," he said. "Also, Lionsgate produces Mad Men, so a new season will be delivered to AMC Networks later this quarter."
 
He also increased his short- term price target on AMC Networks to $44 from $40, arguing that "investor enthusiasm may aid some multiple expansion ahead of the new Mad Men season, which is expected to premiere on the AMC network in late March." Added Joyce: "The generally improving ad market should also help."

In the same vein, he removed his short-term $29 price target on CBS Corp. and said he would now focus on his $33 target, which he had previously eyed for the longer-term. "As it would appear the U.S. is avoiding a recession and could grow slightly, signs are pointing to a better TV ad market in the first quarter," Joyce wrote in a report. "And CBS should be a main beneficiary in the scatter market due to its ratings strength and lack of make-goods."

Joyce also boosted his short-term price target on Walt Disney from $39 to $44. Beyond TV ad opportunities, he said "modest U.S. economic growth should help parks & resorts attendance." Plus, the studio division "should do well with a 3D Beauty & The Beast release and a new Avengers release late this spring," he said.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai