Lions Gate (LGF) Stock Downgraded at Bernstein

Lions Gate (LGF) stock rating was lowered to ‘market perform’ from ‘outperform’ at Bernstein on Thursday.
By Kaya Yurieff ,

NEW YORK (TheStreet) -- Lions Gate Entertainment (LGF) stock rating was cut to "market perform" from "outperform" at Bernstein on Thursday, the Fly reports.

The firm also reduced its price target to $22 from $34 on shares of the Santa Monica, CA-based entertainment company.

The lower rating and price target are due to concerns over the company's proposed acquisition of media and entertainment company Starz (STRZA).

Bernstein believes the deal will expose the studio to the part of the entertainment market that is "in structural decline," the Fly noted.

Over time, a growing share of industry profit and value would accrue to Lions Gate as structural forces affecting the TV value chain hurt networks and benefit studios, the firm said.

But with the Starz acquisition, investors will own more network than studio, and financial performance will hinge mostly on the success of Starz, Bernstein added, according to the Fly.

Despite the downgrade, Lions Gate shares closed up 1.21% to $20.06 on Thursday.

Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on Lions Gate stock.

The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins.

But the team also finds weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: LGF

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