Analyst Upgrades Lionsgate, Citing 'The Hunger Games'

8:58 AM PST 01/03/2012 by Georg Szalai
Stan Honda/AFP/Getty Images

Miller Tabak's David Joyce also hikes his short-term price targets on Walt Disney, CBS Corp. and AMC Networks, predicting slight economic growth in the U.S.

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.

"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

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