Will Lions Gate (LGF) Q1 Earnings Meet Expectations? - Analyst Blog
Lions Gate Entertainment Corp. LGF, producer and distributor of motion pictures for theatrical and straight-to-video release, is set to report its first-quarter fiscal 2016 results on Aug 6. Last quarter, it posted a negative earnings surprise of 21.9%. Let’s see how things are shaping up for this announcement.
Factors Influencing the Quarter
The company’s Television segment looks strong and its efforts to expand online are admirable. Although the company delivered a subdued performance in the last quarter, its efforts to build a diversified portfolio through strategic acquisitions and alliances cannot be overlooked.
However, the escalating cost of motion picture production and marketing may jeopardize Lions Gate’s margins. Moreover, intensifying currency headwinds might weigh on the company’s performance.
Considering the aforementioned factors, we believe the company’s upcoming results might fail to impress and hence, remain cautious about the stock’s future performance.
Earnings Whispers
Our proven model does not conclusively show that Lions Gate Entertainment is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: ESP for Lions Gate Entertainment is -20.00%. This is because the Most Accurate estimate stands at 8 cents per share and the Zacks Consensus Estimate is 10 cents.
Zacks Rank: Lions Gate Entertainment carries a Zacks Rank #3 (Hold). Though a Zacks Rank #3 increases the predictive power of ESP, the company’s ESP of -20.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:
Jack in the Box Inc. JACK has an Earnings ESP of +2.74% and a Zacks Rank #1 (Strong Buy).
The Walt Disney Company DIS has an Earnings ESP of +2.16% and a Zacks Rank #3.
Coach, Inc. COH has an Earnings ESP of +3.45% and a Zacks Rank #3.
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COACH INC (COH): Free Stock Analysis Report
LIONS GATE ETMT (LGF): Free Stock Analysis Report
DISNEY WALT (DIS): Free Stock Analysis Report
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