ok. Barrington maintained an Outperform rating on Lions Gate with a price target of $41. Analyst James C. Goss previewed Q4 results, set for May 29th. He also said he doesn't see an "earning cliff."
"We estimate that Lionsgate will report EPS of $0.40 for its fourth quarter of fiscal 2014 revised from $0.49, bringing our full‐year estimate to $1.10, down from $1.20. The primary variance in our EPS estimate revision was a more aggressive tax rate assumption of 30%, in line with recent experience and above our unduly low 20% prior assumption. Our revenues estimate for the fourth quarter has also been lowered to $839.4 million from $854.7 million. We anticipate that the will company fourth quarter EBITDA of $118.1 million, which is slightly below our previous estimate of $123.1 million," said analyst James C. Goss.
"Some investors are apparently concerned that 2017 or 2018 will pose an “earnings cliff” risk following the final currently planned installment in The Hunger Games franchise. However, we feel that while the success of any individual film is extremely difficult to predict, Lionsgate has been compiling an impressive track record of developing franchises and individual smaller successes, and has a number of titles in production about which management has confidence. Further, there can be opportunities within some of the established franchises for additional releases," he added.