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Lions Gate Upped to Strong Buy on Impressive Q1 Earnings

Zacks Equity Research

On Aug 13, 2014, Zacks Investment Research upgraded Lions Gate Entertainment Corp. (LGF) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Lions Gate has been witnessing rising earnings estimates in the last 7 days on the back of strong first-quarter fiscal 2015 earnings. Moreover, this movie and television production company has delivered positive earnings surprises in the trailing four quarters with an average beat of 81.2%. The long-term expected earnings growth rate for this stock is 17.5%.   

The company reported adjusted quarterly earnings of 27 cents a share, which rose over two-fold from 10 cents a share reported last year and also surpassed the Zacks Consensus Estimate of 13 cents. The improvement in adjusted earnings was backed by a fall in interest expense coupled with a lower tax rate.

The Zacks Consensus Estimate for fiscal 2015 and 2016 increased 10.3% and 2.8% to $1.60 and $1.81 per share respectively.

Lions Gate is fast emerging as a leading player in the media industry which boasts of stalwarts like The Walt Disney Co. (DIS) and CBS Corp. (CBS). With franchises like The Hunger Games and Divergent, the studio has tasted tremendous success. Lions Gate acquired Summit Entertainment in 2012 giving it the rights to the hugely popular young-adult fantasy themed Twilight series.

The studio is grabbing every possible opportunity to expand its presence and soon might become a recognizable power within the media circle.

Other Stocks to Consider

Other home furnishings retailers with a favorable Zacks Rank include Disney and Pearson plc (PSO). Both carry a Zacks Rank #2 (Buy).

Read the Full Research Report on CBS
Read the Full Research Report on LGF
Read the Full Research Report on DIS
Read the Full Research Report on PSO

Zacks Investment Research