'Hunger Games' Lifts Lions Gate (LGF) to 52-Week High

NEW YORK ( TheStreet) -- Shares of Lions Gate Entertainment ( LGF) hit a 52-week high on Tuesday, three days before the release of The Hunger Games, the highly anticipated movie.

Shares of Lions Gate hit a 52-week high Tuesday of $14.78. It was trading on about double its average daily trading volume Tuesday. The stock's 52-week low of $5.76 was set on May 31.

The stock rose almost 8% on Monday.

"We are increasing our Lionsgate Entertainment (LGF-$14.58-Buy-Target $17) target to $17 (the midpoint of our DCF valuation, and high-end of our sum-of-the-parts valuation) from $14 due to continued positive sentiment toward the upcoming The Hunger Games theatrical release, which could generate $100-$110 mm in opening weekend box office receipts and could go on to be a $300 mm film," Miller Tabak analysts wrote in a report on Tuesday. "By way of comparison, the Twilight franchise has averaged $270 mm at the domestic box office + $359 mm at the international box office = $629 mm average, and LGF aims to tap into that same core target audience with The Hunger Games."

Hudson Square analysts said in a report that Lions Gate's success and future is about more than just The Hunger Games.

"Beyond Hunger Games we believe Lionsgate has developed a strong record in identifying and launching hit franchises, from films such as Saw and Expendables to TV shows such as Weeds and Mad Men," Hudson Square analysts wrote in a report on Tuesday. "We expect that record to continue."

Lions Gate has an estimated price-to-earnings ratio of 14.81 times; the average for broadcasting and entertainment companies is 44.5. For comparison, DreamWorks Animation ( DWA) has a higher forward P/E of 17.85.

Seven of the 11 analysts who cover Lions Gate rated it buy. Two analysts gave the stock a hold rating and another two rated it sell.

TheStreet Ratings gives Lions Gate a C grade and a hold rating. The stock has risen 76.32% year to date.

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-- Written by Alexandra Zendrian

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