'A decent hiding nook': Analyst reiterates 'buy' on Hunger Games studio Lionsgate

Shares of Hollywood studio Lionsgate Studios, behind Hunger Games, offer “a decent hiding nook” in an uncertain market and economy, especially given “evident M&A interest,” according to a recent update on the stock by Matthew Harrigan, an analyst at StoneX. He has reiterated his "buy" call and sees 40% upside.

One argument Harrigan cited for owning the stock is takeover interest from Legendary Entertainment, the producer of the Dune and Minecraft film franchises. Legendary has revived talks to acquire Lionsgate that began last year and submitted a takeover offer, Bloomberg reported in October, citing sources familiar with the matter.

Bloomberg later reported that Lionsgate was talking to potential investors about a possible bond sale backed by its film and television library. Mitsubishi UFJ Financial Group is arranging the preliminary discussions. Harrigan believes such a transaction could help finance a potential takeover.

Among other positives for Lionsgate, Harrigan highlighted the upcoming November premiere of "The Hunger Games: Sunrise on the Reaping." It is the sixth installment in the film series based on Suzanne Collins’ novels.

Harrigan has maintained his target price of $17 per share, 40% above Monday’s closing price of $12.14 per share. The valuation is based on Lionsgate’s “compelling film pipeline,” Harrigan explained. He singled out "Resurrection of the Christ," the sequel to Mel Gibson’s "The Passion of the Christ," whose two installments are scheduled for release in 2027 and 2028, respectively.

Harrigan also pointed to opportunities to monetize Lionsgate’s library and an approximate doubling of new television series and show production. In addition, Lionsgate and Steven Paul’s SP Media announced a new joint venture last week involving “significant” capital investment by SP Media in new ventures, he noted.

In May 2025, Lionsgate’s studio business and Starz became two independent publicly traded companies. Following the separation, Lionsgate emerged as a potential takeover target for several companies, including Netflix, Bloomberg writes.

For the quarter ended June 30, the Hollywood studio’s revenue rose almost 48% year over year to $776.6 million. Corporate debt stood at $1.94 billion at the end of the quarter.

Since May 8, 2025, when Lionsgate became independent, its stock has gained around 56%. Wall Street is broadly upbeat on the name, with 10 “buy” calls, four “hold” ratings, and just one “sell” recommendation. The average target price of $15.17 per share implies 25% upside from the last close.