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Huge 'Hunger Games' Weekend Box Office Haul Has Analysts Bullish on Lionsgate

Unwanted Guests
Joe Pugliese

Stock in the indie studio jumped at the opening bell on the New York Stock Exchange after the teen tentpole surpassed street estimates and raked in $155 million domestically.

TORONTO – The Hunger Games surpassing estimates with a $155 million opening weekend on Monday had bullish entertainment analysts raising share price and profit forecasts for the indie studio.

Stock in Lionsgate jumped 5 percent to $15.22 soon after the opening bell on the New York Stock Exchange after the huge box office haul for the teen tentpole.

Stifel analyst Ben Mogil raised his Lionsgate share price target to $19.00, from $17.50, following the opening weekend for Hunger Games.

“Exit polls showed a far broader demographic than had been originallly anticipated, boding well for second week performance,” Mogil predicted.

The raised target price was based in part on an estimated $57 million jump in Lionsgate’s EBITIDA for full-year 2012.

David Joyce at Miller Tabak said the bigger opening weekend for The Hunger Games than expected could trigger earlier revenue and production cost recognition than had been anticipated.

So Joyce raised his fourth quarter 2012 revenue estimate from $615 million to $694 million, and the EBITIDA to $138 million, up from a prior $106 million estimate.

The Miller Tabak analyst reiterated a $17.00 price target for Lionsgate stock.

Cowen analyst Doug Creutz, while maintaining an outperform rating on Lionsgate stock, also raised his EBITIDA estimate for full-year 2012 to $153.9 million, from an earlier estimate of $121.8 million.

Creutz forecast a $350 million domestic box office for The Hunger Games, while international box office, though not as “explosive” as the eventual domestic take, will still be solid.

Lionsgate presold the international rights to The Hunger Games, but is poised to collect generous overages based on the film’s international performance, Creutz commented.

Wunderlich Securities’ Matthew Harrigan was also bullish on the prospects for Lionsgate after it hit a “bullseye” with the $155 million opening weekend.

“The movie remarkably fell only 25% on Saturday, supporting our hypothesis that it could have an inordinately high hold next week off an A CinemaScore, fanboy and fangirl repeat business, and even more crossover appeal for older audiences who may have shied away on the first weekend,” Harrigan argued, looking ahead to next weekend.