Baird said Starz Entertainment investors are focused on the streaming platform’s prospects in the evolving entertainment landscape as it revamps its content, giving the stock plenty of room to play. The investment firm upgraded the stock from Neutral to Outperform. He also raised his price target to $30 from $12, implying a 52% upside from Friday’s closing price. “STRZ remains in a unique and advantageous position in the entertainment industry, strengthened by its separation from the studio nearly a year ago,” analyst Vikram Kesavabothla said in a note to clients. “As we look to the future, we see an interesting combination of factors forming to support the stock’s outperformance, including a healthier monetization strategy, more engaging content, and an improved profitability and leverage profile.” The analyst said the company is adopting a healthier monetization strategy that deprioritizes quarterly subscribers. This allows Starz to focus more on developing “a compelling content slate that benefits customer acquisition, retention and monetization,” he added. Kesavabhotla also noted that the company’s profitability has already improved, thanks in part to ownership economics. Baird’s call runs counter to Wall Street consensus. Of the eight analysts covering Starz, five own the stock, and just three rate it a buy, according to LSEG data. The stock is up 69% year-to-date, significantly outperforming the broader market.
