Lions Gate's Expected Summer Success Should Encourage A Strong 2017, Says Macquarie Capital

Macquarie Capital's Amy Yong raised her price target to $27.00 from $25.00 for Lions Gate Entertainment Corp. (USA) (NYSE: LGF). "Lions Gate is now one of few remaining independent studios and its strategic value will likely continue to rise," Yong said.

In lieu of the 10k review, Yong sees a "deeper and more diversified film slate" for FY17. She estimates FY17 motion picture revenue will go up to $291 million for Q1 and $1.65 billion for the whole year. FY17 is expected to have more releases with a $100 million lower production budget.

The large releases for the company are:

• "Now You See Me 2 "
• "Nerve"
• "Patriots Day"
• "Power Rangers"

Related Link: Lions Gate Pops 8% Following Q4 Beat, Analysts Weigh In

While expectations for summer blockbusters are solid, the company's main earnings surge will come from its growing TV segment. FY17 "brings a more balanced, cost efficient, and robust slate," Yong noted.

"Orange is the New Black" and "The Royals" are notable series back in FY17. New series on the docket include "Feed the Beast" (AMC), "American Lion" (HBO), "Guilt" (Freeform) and "Greenleaf" (OWN). In addition to the growth in series, a new distribution deal with Pilgrim Studios is in the works.

Lions Gate closed Tuesday trading up 2.11 percent at $22.30.