'Insurgent' Bolsters Franchise Potential for Lionsgate's 'Divergent,' Analysts Say

Andrew Cooper

Despite not meeting domestic expectations, a strong international opening for the YA sequel has market watchers bullish on the movie property's upside potential.

It failed to top its predecessor's debut last year, but a strong opening weekend internationally for Insurgent had analysts on Monday playing up the franchise potential for Divergent.

The $54 million domestic opening weekend for Insurgent was just shy of the $54.6 million North American debut for the original movie, Divergent. At the same time, Insurgent earned $46 million in 76 foreign markets since debuting March 18 overseas, up 34 percent from Divergent's international debut of $33 million last year.

Based on the best-selling book series by Veronica Roth, Insurgent returns star Shailene Woodley as a young woman who poses a threat to society after failing to fit into one of five strictly categorized factions.

"We do expect international box office to grow meaningfully from Divergent's $138 million [international box office] performance," Doug Creutz, an analyst with Cowen and Co., said in an investors note. However, Creutz cautioned Lionsgate pre-selling rights in most international markets meant any upside profit from box-office over-performance by Insurgent would not be as big as in the domestic market.

Two more sequels have been announced in the series: Allegiant Part 1, to be released on March 18, 2016, and Allegiant Part 2 on March 24, 2017.

Wunderlich Securities analyst Matthew Harrigan, in his own investors note, said a higher profile internationally for Roth's books and Insurgent playing well on 3D and Imax screens should fuel growth overseas for the Divergent franchise. "Although full-run domestic potential may slightly lag the first film's $151 million, overseas gains could take the global tally to at least north of $300 million vs. $288.7 million for Divergent," he argued.

B. Riley Co. analyst Eric Wold had been looking for a domestic opening in the $60 million to $61 million range for Insurgent to support a $170 million full-run estimate. Despite Insurgent falling short of domestic box-office expectations, Wold pointed to a solid opening internationally and name recognition for the movie's cast, including Woodley, to "see strength in overseas markets more than offsetting the slight domestic weakness and keeping our model/estimates intact."

Shares in Lionsgate fell 16 cents to $33.50 in price during mid-morning trading on the New York Stock Exchange.

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