On Tuesday, Rosenblatt Securities adjusted its financial outlook for shares of Lions Gate Entertainment Corp. (NYSE:LGF-B). The firm's analyst has reduced the price target for the company's shares to $13.00, a decrease from the previous target of $15.00. Despite this change, the analyst continues to recommend a Buy rating on the stock.
The revision comes in response to a weaker-than-expected performance of Lions Gate's theatrical releases in the September quarter. This underperformance has led to a downward revision in the forecast for the Studio Adjusted Operating Income Before Depreciation and Amortization (OIBDA) for the fiscal year 2025. The new estimate stands at $316 million, which is $63 million lower than the previous projection.
As a result of the reduced Studio OIBDA forecast, the analyst has adjusted the consolidated OIBDA estimate downward by the same amount to $434 million. This adjustment has had a direct impact on the sum-of-the-parts (SOTP) valuation model, which is used to determine the fair value of a company's shares by analyzing its individual segments.
Despite the cut in the price target, the firm's stance on Lions Gate Entertainment Corp. remains positive with the Buy rating intact. The new price target of $13.00 reflects the updated financial expectations and the impact of recent performance on future earnings potential.
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