Baird initiates coverage on Starz Entertainment stock with Neutral rating

Investing.com - Baird initiated coverage on Starz Entertainment (NASDAQ:STRZ) with a Neutral rating and a $13.00 price target on Friday. The company, currently valued at $214 million, trades at a modest 0.3x price-to-book ratio and generates a 15% free cash flow yield, according to InvestingPro data.

The research firm cited positive aspects of the company’s standalone operations, including plans to refresh its content pipeline and restore ownership economics.

Baird noted there appears to be a path for Starz Entertainment to achieve meaningful margin expansion over time, suggesting potential for future growth.

Despite these positive factors, Baird expressed concerns that investors may need time to gain confidence in the company’s execution, while other obstacles could limit institutional interest in the shares. InvestingPro analysis reveals additional insights about the company’s financial health and valuation metrics, with over 30 key indicators available for subscribers.

The firm indicated that while Starz Entertainment could present a compelling multiple expansion opportunity in the future, a current lack of catalysts led to the sideline stance reflected in the Neutral rating. The company’s current ratio of 0.18 suggests potential liquidity challenges that warrant careful monitoring.

In other recent news, Starz Entertainment reported a decline in both revenue and subscribers in its Q2 2025 earnings call. The company’s total revenue dropped to $319.7 million, representing a 2% sequential decline and a 7.4% year-over-year decrease. Despite these challenges, Starz remains optimistic about achieving revenue and subscriber growth in the upcoming quarters. Additionally, Morgan Stanley has lowered its price target for Starz Entertainment to $14.00 from $15.00, maintaining an Equalweight rating. The firm cited Starz’s smaller size and lower investment levels as limiting factors for subscriber growth and pricing power compared to larger competitors. In corporate governance news, Starz Entertainment appointed Ed Wilson to its board of directors. Mr. Wilson will serve on both the Nominating & Corporate Governance Committee and the Audit & Risk Committee. His compensation will align with that of other non-employee directors, as detailed in the company’s recent SEC filing.

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