Lionsgate Studios Holding Corp.

Lionsgate Studios reported fiscal first-quarter revenue rose 48% year over year to $777 million, driven by a record motion-picture segment profit of $105 million from releases including Michael and The Housemaid. Free cash flow reached $129 million, while net debt declined by $121 million to approximately $1.5 billion, reducing leverage to 4.3 times. Management expects significant adjusted OIBDA and free-cash-flow growth in fiscal 2027, supported by upcoming films such as The Hunger Games: Sunrise on the Reaping, doubled scripted-episode deliveries, and a new international Netflix licensing agreement for the Power franchise. The company said it has not held substantive M&A discussions despite market speculation, but emphasized the strategic value of its franchise portfolio and intellectual property.

Seeking Alpha analysts are divided on whether Netflix needs to make an acquisition. Oliver Rodzianko argues Netflix is best off reacquiring its own stock, citing a $27.1 billion repurchase authorization and management's preference for building over buying, though he names Lionsgate Studios as the clearest public content option if permanent IP is desired. Steven Mallas contends Netflix should acquire to more easily enter the theatrical business, calling Lionsgate an ideal target with an enterprise value around $8 billion that would expand Netflix's intellectual property portfolio. Elina Selianska counters that big M&A makes zero strategic sense, noting Netflix has hit a hard ceiling in North America and that buying legacy studios would not provide new geographic reach or better technology, while further expansion into fragmented markets like Europe would crush margins.

SpaceX shares fell for a fourth straight session, dipping below their $135 initial public offering price for the first time. Apple rose about 4% to a fresh high after its Apple Intelligence cleared a major regulatory hurdle in China, lifting partner shares Alibaba by 5% and Baidu by 2%. Memory stocks pulled back sharply, with Micron, Seagate, and Western Digital each down around 8% and Sandisk tumbling more than 11% on fears of intensifying competition from Chinese chipmaker ChangXin Memory Technologies. Cava gained 5.5% after Morgan Stanley upgraded the fast-casual chain to overweight, calling it one of the strongest fundamental stories in restaurants. Lionsgate jumped more than 6% on a Reuters report that the studio is exploring a sale and has drawn interest from France's Bollore Group and Banijay Group. Progressive fell more than 7% after reporting a 31% drop in June income and a combined ratio rising to 90%, dragging Allstate down 4%, AON down less than 1%, and Travelers down almost 2%. Lucid Group rebounded 19% after denying reports of bankruptcy or take-private talks, saying it has sufficient liquidity into next year. BlackRock jumped more than 7% on better-than-expected adjusted earnings of $13.91 per share versus an LSEG estimate of $12.59. Pentair tumbled more than 17% after preliminary second-quarter adjusted earnings of $1.12 a share missed the $1.48 FactSet consensus. Morgan Stanley edged up after record quarterly revenue and profit, with earnings of $3.46 per share beating the $2.94 estimate. PayPal surged 17% on a Reuters report that Stripe and Advent offered to buy it for $53 billion, or $60.50 per share. Elevance Health fell 10% despite second-quarter revenue above consensus and raised full-year earnings guidance. Bank of New York Mellon rose nearly 3% after an earnings and revenue beat, with double-digit revenue growth now expected in 2026 but higher expenses also forecast.

Shares of PayPal jumped 16% after reports emerged that Stripe and Advent International have jointly offered to acquire the payments company for $60.50 per share, valuing PayPal at more than $53 billion. The reported offer, backed by roughly $50 billion in committed financing, represents a 28% premium to PayPal's prior closing price, with Stripe and Advent each owning 50% of the combined business if a deal proceeds. Meanwhile, Pentair plunged 16% after slashing its second-quarter and full-year 2026 guidance and announcing the resignation of its CFO, citing deeper-than-expected inventory destocking in its Pool segment. Aehr Test Systems surged 30% on a fourth-quarter earnings beat and strong fiscal 2027 revenue guidance of $130 million to $150 million, well above consensus. Lionsgate Studios rose 4% on a report that it is exploring a potential sale and has attracted takeover interest from France's Bolloré Group, while Wabash fell 14% after announcing a $100 million convertible notes offering.

Lionsgate Studios jumped 9% in after-hours trading following a Reuters report that the entertainment company is exploring a sale and has received takeover interest from France's Bollore Group. The studio behind the "Hunger Games" and "John Wick" franchises is working with an investment bank to evaluate inbound interest, though a deal is not certain and Lionsgate may decide to remain independent. Banijay Group, the TV producer behind "Big Brother" and "Survivor," is among other suitors that have evaluated a bid. The valuation sought by shareholders could make it harder for potential buyers to reach an agreement, with previous suitors having stepped away due to price expectations.

B. Riley Securities initiated coverage of Lionsgate Studios with a Neutral rating and a $17 price target, citing improving operating fundamentals but a full valuation after the stock's recent rally. The price target represents about 11% upside from the stock's last close at $15.31 on Tuesday. The brokerage noted the Motion Picture business is supported by the strong box office performance of Michael, a film pipeline anchored by franchises including The Hunger Games, John Wick, and The Resurrection of the Christ, and a recovery in the theatrical market. It also expects the Television Production segment to rebound in fiscal 2027, driven by higher scripted episodic deliveries, stable library revenue, and easier year-over-year comparisons. B. Riley forecast fiscal 2027 revenue and adjusted OIBDA growth, alongside improving free cash flow that should support a gradual reduction in leverage over time, but flagged leverage as a near-term constraint with about $1.94 billion in long-term debt and net leverage of 6.1 times entering fiscal 2027. The firm said acquisition speculation is likely to remain part of the investment narrative following Lionsgate's separation from Starz, while adding that the timing of any potential transaction remains uncertain, and based its $17 price target on a 17.2-times multiple of its fiscal 2027 adjusted OIBDA estimate.

Seeking Alpha analysts Max Greve and Chris DeMuth Jr. identified Lionsgate and AMC Global Media as potential takeover targets following Fox's agreement to acquire Roku at an enterprise value of around $22 billion. Greve categorized media deals into small, large, and large with parks, noting that Lionsgate and AMC Global Media could supplement existing content libraries for players like Comcast, Paramount, or Disney, while Starz might attract a new entrant with capital. DeMuth Jr. specifically pointed to Lionsgate as the next likely target, citing more demand than supply for its assets even though Netflix has disavowed interest. He also expects the Warner Bros. and Paramount deal to close but warned of a winner's curse from competitive bidding.

Lionsgate Studios Corp. shares surged to an all-time high on Tuesday following a report that Netflix is eyeing an acquisition of the company. The stock reached an intraday peak of $16.70 before closing at $16.36, up 13.85 percent, marking its fifth straight day of gains. Semafor reported that Netflix has set its sights on Lionsgate but has not yet made a formal offer, and neither company has commented. The rally also followed Lionsgate's swing to a $70.2 million attributable net income in the fourth quarter of fiscal 2026, reversing a $117.4 million loss a year earlier, while quarterly revenue rose 5.8 percent to $906.5 million.