This streaming stock is set for even more gains ahead, according to Baird

Starz Entertainment’s investors are warming up to the streaming platform’s prospects in the evolving entertainment landscape as it refreshes its content, giving shares plenty of room to run, according to Baird. The investment firm upgraded the stock to outperform from neutral. It also hiked its price target on shares to $30 from $12, implying 52% upside from Friday’s close. “STRZ holds a unique and favorable position in the entertainment landscape, strengthened by its separation from the studio roughly one year ago,” analyst Vikram Kesavabhotla said in a note to clients. “Looking ahead, we see an interesting mix of drivers forming that should support outperformance in the shares - including a healthier monetization strategy, a compelling content slate, and an improving profitability/leverage profile.” The company has adopted a healthier monetization strategy that is deprioritizing quarterly subscribers, according to the analyst. That has allowed Starz to focus on developing a more “compelling content slate, which should benefit customer acquisition, retention, and monetization,” he added. Kesavabhotla also noted that the firm’s profitability has already improved, in part due to its ownership economics. Baird’s call goes against consensus on Wall Street. Of the eight analysts covering Starz, five have a hold on the stock, while just three have a buy rating on it, LSEG data shows. Shares have jumped 69% in the year to date, vastly overperforming the overall market.