‘Catching Fire’ Boosts Lionsgate Stock To Records
Wall Street’s bullishness over prospects for Jennifer Lawrence’s “The Hunger Games: Catching Fire” has helped boost Lionsgate stock to a record high.
One analyst predicted that the worldwide box office for the second “Hunger Games” film will hit $900 million.
The issue gained 2.5% on Tuesday, rising 74 cents to $29.93, then rose another 36cents to $30.29 in trading Wednesday after reaching $30.88 earlier in the session. The previous high close came on June 3, when Lionsgate signed CEO Jon Feltheimer to a five-year extension.
Piper Jaffray said Tuesday it recommended the stock as its favorite mid-cap name in 2013 and singled out “Catching Fire,” due out Nov. 22.
“While the second ‘Hunger Games’ film is an obvious catalyst, we see a number of other interesting initiatives across the company that will drive value,” analyst James Marsh wrote. “The film release slate is looking deeper (‘Red 2,’ ‘Ender’s Game,’ ‘Divergent’), we like the odds of a ‘Twilight’ extension, and international distribution deal economics are improving. In addition, we think Television has plenty of momentum following the success of ‘Anger Management’ and ‘Nashville.’”
Piper Jaffray reiterated its overweight rating and $32 price target.
David Miller of BRiley & Co. issued a similarly bullish report and repeated his $34 target, predicting that “Catching Fire” will gross $900 million worldwide. That’s 22% above the $691 million gross for “The Hunger Games,” will Miller noting that the popularity of the “Hunger Games” book trilogy has “exploded” overseas since last year’s release of the first film.
Miller also said he expects Lionsgate is set to dramatically increase its TV Production output by as much as 15% in the 2015 fiscal year.
Wall Street has been a strong supporter of Lionsgate, with the stock having quadrupled in less than two years due to success in young-adult franchises such as “Twilight” and “The Hunger Games,” and a growing TV operation with such shows as shows “Mad Men” and “Nurse Jackie.” It finished fifth among the majors in 2012 with $1.24 billion in domestic box office and currently has 28 TV shows on 20 networks.
The final two “Hunger Games” films will be released in November, 2014 and November, 2015.
The stock was trading in the $7 range in August 2011 when Feltheimer and vice chair Michael Burns worked out a deal to cash out Carl Icahn’s 33% stake, ending three years of battling with the combative billionaire.