Lions Gate Entertainment Corp last December announced plans to merge with Screaming Eagle Acquisition Corp ( SCRM ) to form Lionsgate Studios Corp.

The company has executed a number of small, yet important acquisitions, which are likely to enhance the studio business and become a value driver," according to Barrington Research.

The Lions Gate Entertainment Analyst: James Goss upgraded the rating for Lions Gate Entertainment from Market Perform to Outperform, while maintaining a price target of $12.

The Lions Gate Entertainment Thesis: The transaction that plans to create a publicly traded entity, traded under the ticker LION, assigns an enterprise value of $4.6 billion to the studio and the public launch could take place in early April, Goss said in the upgrade note.

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Following the transaction, Lions Gate Entertainment can increase its focus on alternatives for Starz, the analyst stated.

"Very recently, acquisitions such as eOne expand the television studio's presence and scale in unscripted programming, in addition to various film and scripted television IP rights, including expanded geographic reach," Goss wrote. He added that exposure to unscripted and syndicated programming has "supported profitability for the segment."

LGF-A Price Action: Shares of Lions Gate Entertainment had risen by 7.63% to $9.88 at the time of publication on Monday.

Image: Lions Gate