Baird initiates Lionsgate Studios stock with Outperform rating, cites IP strength

Published 05/09/2025, 10:56
Baird initiates Lionsgate Studios stock with Outperform rating, cites IP strength

Investing.com - Baird initiated coverage on Lionsgate Studios Corp (NASDAQ:LION) with an Outperform rating and set a price target of $8.00 on Friday. According to InvestingPro data, this target represents significant upside from the current trading price of $6.20, with other analysts setting targets as high as $10.71.

The research firm highlighted that Lionsgate’s investment case has become more attractive now that it operates as a standalone, pure-play content business. Baird specifically noted the company’s intellectual property portfolio and its risk-mitigated approach to the market. InvestingPro data reveals the company faces some financial challenges, with short-term obligations exceeding liquid assets and a current ratio of 0.45.

Baird identified multiple potential catalysts that could drive share performance as Lionsgate moves beyond what it describes as a transition year in fiscal 2026. These include possible outperformance from an "increasingly compelling content slate" and the potential for an acquisition of the business. The company has demonstrated revenue growth of 10.9% over the last twelve months, though profitability remains a challenge. Get deeper insights and access to comprehensive analysis with a InvestingPro subscription.

The firm also pointed to expectations for a "significant recovery" in fiscal 2027 adjusted OIBDA (operating income before depreciation and amortization) as another factor supporting its positive outlook.

Lionsgate Studios, known for its film and television content production, is positioned for growth according to Baird’s analysis, which concluded there is "an attractive opportunity" in the stock at current levels.

In other recent news, Lionsgate Studios Holding Corp reported its Q1 FY2026 earnings, revealing a revenue of $556 million alongside an operating loss of $10.6 million. Despite these financial results, the company remains focused on strategic expansions and new content projects, which have contributed to maintaining stable investor sentiment. No mergers or acquisitions were announced in the latest updates. Analyst firms have not publicly upgraded or downgraded the stock following the earnings report. Investors are closely monitoring Lionsgate’s plans and developments as the company continues to prioritize growth initiatives. The company’s recent earnings call emphasized its commitment to expanding its content portfolio. These developments are being observed by stakeholders as Lionsgate navigates its strategic direction.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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