Lions Gate (LGF.A) Strengthens Partnership With Nordisk Film
Lions Gate Entertainment Corporation LGF.A recently solidified its longstanding partnership with Nordisk Film. The two companies signed a multi-year distribution deal for the Scandinavian market.
The deal includes titles from Lionsgate and its Summit Entertainment label including “action comedy The Spy Who Dumped Me, the stylish thriller A Simple Favor, the Charlize Theron/Seth Rogen comedy Flarsky, and the star-driven event films The Kingkiller Chronicle: The Name of the Wind, John Wick: Chapter Three and Chaos Walking.”
Lions Gate’s is looking to attract the Scandinavian audience with its wide portfolio of star-studded commercial movies. The Scandinavian market is considered a lucrative one and will aid the company to expand its international footprint.
The company currently has key partnership deals with “StudioCanal in Australia, Leone Film Group in Italy, Metropolitan Filmexport and SND in France, Belga Films in Benelux, Eagle Films and Jaquar Films in the Middle East, Encore Films and Golden Village in Singapore, Monolith in Poland, and eOne in Spain.”
We believe the deal with Nordisk Film adds another feather to its cap and will boost its financials.
Lions Gate’s Performance in Recent Times
Recently, the company reported first-quarter fiscal 2019 adjusted earnings of 18 cents per share that beat the Zacks Consensus Estimate by 3 cents but plunged 64% from the year-ago quarter. However, revenues declined 7.2% year over year to $932.7 million.
Lions Gate Entertainment Corp. Revenue (TTM)
Lions Gate Entertainment Corp. Revenue (TTM) | Lions Gate Entertainment Corp. Quote
Lions Gate has been gaining from its focus on profitable areas and strategic buyouts like that of Starz. These are helping the company to regain its lost ground in streaming network. Also, Lions Gate’s investment in The Immortals to capitalize on the rising popularity of e-sports bodes well.
However, Lions Gate is restructuring its film slate business, which is likely to put pressure on fiscal 2019 results. The company has repositioned its film business and increased spending on Starz programming. As a result, it expects fiscal 2019 results to be almost in line with fiscal 2018.
Additionally, motion picture production’s escalating costs related to marketing in recent years may jeopardize margins. Further, the company has lowered its three-year compound annual growth rate (CAGR) guidance ended fiscal 2020 and now expects it to be in the range of mid to high single-digit range. This keeps us a bit cautious about its near to mid-term performance.
Zacks Rank and Key Picks
Lions Gate Entertainment has a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader technology sector include Vishay Intertechnology, Inc. VSH, Micron Technology, Inc. MU and Stratasys, Ltd. SSYS. While Vishay Intertechnology sports a Zacks Rank #1 (Strong Buy), Micron and Stratasys both have a Rank #2 (Buy).
You can see the complete list of today’s Zacks Rank #1 stocks here.
The long-term earnings growth rate for Vishay Intertechnology, Micron and Stratasys is projected to be 9.2%, 8.2% and 15.6%, respectively.
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