Analyst Note on Lionsgate Studios Corp.
B. Riley Securities has initiated coverage of Lionsgate Studios Corp. with a Neutral rating and a price target of $17 per share. The brokerage highlights that the stock has surged more than 130 % since the company’s separation from Starz Entertainment Corp., a rally driven by takeover speculation and optimism around its content pipeline. The current valuation of roughly 17 times forward adjusted OIBDA is said to already incorporate much of the near‑term upside.
The firm points to the strong performance of the recent blockbuster Michael, which has generated approximately $960 million at the global box office, making it the highest‑grossing film in Lionsgate’s history. In addition, a robust upcoming slate featuring new installments of major franchises such as The Hunger Games: Sunrise on the Reaping and John Wick: Chapter 5 is expected to sustain revenue growth.
B. Riley forecasts that Lionsgate’s television production business will rebound in fiscal 2027, supported by renewals for 12 of its 13 scripted series and an almost doubling of episodic deliveries. Library revenue has exceeded $1 billion on a trailing‑12‑month basis for three consecutive quarters, and the brokerage projects segment revenue of $1.4 billion to $1.5 billion annually over the coming years.
Industry fundamentals are improving, with the U.S. box office tracking about 15 % higher year‑to‑date in 2026 and on pace for its strongest post‑pandemic performance. Factors such as an increase in film releases, longer theatrical windows, and new labor agreements across Hollywood are expected to further bolster studio profitability.
Despite the favorable outlook, the analysts identify Lionsgate’s balance sheet as a constraint. The company entered fiscal 2027 with roughly $1.94 billion of debt and net leverage of 6.1 times EBITDA. B. Riley expects gradual debt reduction and stronger free‑cash‑flow generation to improve leverage metrics over the next several years. Ongoing industry consolidation and Lionsgate’s extensive content library could keep merger‑and‑acquisition speculation alive, providing additional support for the stock.