Lionsgate Shares Drop on Fears Latest 'Hunger Games' Will Open Short of $150 Million

The Hunger Games Mockingjay Part 1 Still 3 - H 2014
Courtesy of Lionsgate

The Hunger Games Mockingjay Part 1 Still 3 - H 2014

One Wall Street analyst told clients to buy shares of the studio if the stock drops again Monday

Shares of Lionsgate Entertainment fell 5 percent on Friday, the day after The Hunger Games: Mockingjay — Part 1 opened domestically, because some observers speculated that its box-office haul would underperform to expectations, even if it opens bigger than any other movie this year.

The third film in the massive Hunger Games franchise opened at 8 p.m. Thursday in the U.S. — as well as in 70 foreign markets — and took in $17 million domestically, which is 33 percent less than the previous installment generated when it opened on a Thursday last year.

Wall Street analyst Eric Wold of B. Riley & Co. told his clients on Friday that while Lionsgate management expects a domestic opening weekend between $130 million and $150 million, analysts and the press were expecting at least $150 million, given the previous installment, The Hunger Games: Catching Fire, opened to $158 million.

Wold said Friday that he wouldn't be surprised if Mockingjay came in at less than $150 million because of bad weather in some parts on the East Coast and a lack of Imax screens showing the film. He also notes that the film scored only a 69 percent favorable rating on Rotten Tomatoes compared to 89 percent for Catching Fire.

Even so, Wold did not alter his prediction that the movie would ultimately generate domestic box office of $425 million and the same for international, for a total of $850 million, roughly $15 million less than Catching Fire but $159 million more than the original Hunger Games in 2012.

"Should a weaker-than-expected opening for [Mockingjay] pressure Lionsgate shares Monday morning, we would take advantage of the shortsighted error and use the opportunity to add to positions," Wold wrote in a research note Friday.

Shares of Lionsgate dropped $1.76 on Friday to $33.25 and are up 6 percent for the year, lagging the 11 percent gain notched by the S&P 500.