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Raymond (NSE:RYMD) James maintained its Outperform rating and $10.00 price target on Lionsgate Studios Corp (NASDAQ:LION) Wednesday despite lowering its OIBDA estimates following disappointing box office results for "Ballerina." The entertainment company, currently valued at $1.69 billion, is trading near its 52-week low of $5.90, with InvestingPro data showing the stock in oversold territory.
The John Wick spinoff starring Ana de Armas and featuring Keanu Reeves opened to a $25 million domestic box office on its opening weekend, falling short of earlier projections of $35-40 million. The film experienced a 65% drop in its second weekend and has generated $42 million in total domestic revenue to date.
Raymond James now projects the film will finish its theatrical run in the $50-65 million range, significantly below previous estimates of $100 million or more, despite the movie receiving generally positive reviews from critics.
The investment firm cited Lionsgate’s stronger upcoming film slate over the next one to two years as a reason for maintaining its positive outlook on the entertainment company’s stock.
Raymond James also noted Lionsgate’s "strategic value as a potential M&A target" as another factor supporting its continued Outperform rating despite the underperformance of "Ballerina" at the box office.
In other recent news, Lionsgate Studios Corp has garnered attention from analysts with mixed ratings following its separation from Starz. Loop Capital initiated coverage with a Hold rating and an $8 price target, highlighting the company’s strategic position and vast film and TV library, which generates nearly $1 billion in annual revenue. The analysts noted that Lionsgate has implemented a defensive strategy with a poison pill to focus on internal growth rather than acquisitions. They expect a rebuilding period in fiscal year 2026, with improved results anticipated in fiscal year 2027 due to a strong film schedule.
Meanwhile, Raymond James gave Lionsgate an Outperform rating with a $10 price target, citing its unique position as the only standalone public film and TV studio. Despite challenges in fiscal year 2025, such as box office disappointments and TV business struggles, Raymond James sees potential for significant revenue growth in the near term. The firm emphasized the value of Lionsgate’s content library and pre-sales of international rights, which help reduce financial risk. Raymond James also speculated that Lionsgate could become an acquisition target for larger tech or media companies.
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