) to neutral from underperform.
Analyst William Drewry says the Hollywood movie studio's fundamental performance has improved, and the balance sheet has moved to debt free/net cash positive. He says MGM is successful on a more conservative film production strategy.
Drewry notes the sector's financial returns are improving on a tailwind of higher profitability of the video window, i.e., DVD. He thinks a special dividend or return of capital to shareholders is probable.
Drewry says it seems as if MGM is for sale, based on recent management comments about a merger synergy, two recent tenders, and potentially more returns of capital in some form to shareholders. He raised the $16 target to $19.