A prominent film analyst is improving Cinemark Holdings (NYSE: CNK) shares and sharing his take on the sector after recent animation hits “Inside Out 2” and “Despicable Me 4” may show strength for 2024.
Movie Theater Analyst: Eric, an analyst at B. Riley Securities, has the following ratings and price targets on the movie theater sector:
Also Read: Cinemark Analyst Upbeat About Box Office Strength, Potential Dividend Return: ‘Should Prosper Over Next Two and a Half Years’
Analysts’ conclusions: The domestic box office in the second quarter amounted to $1. 95 billion, lower than estimates of $2. 35 billion and a 27% drop year-over-year, as indicated in the new note to investors.
would see a more positive picture for the third and fourth quarters, while reducing estimates for the full year 2024 and 2025.
“We remain incredibly positive about a rebound in 2025, given the strong slate and delayed titles starting in 2024. “
The analyst notes that individual stocks are the key to strength in the second half of 2024. This would raise domestic cash projections for the recently released “Despicable Me 4” from $260 million to $315 million and for “Inside Out 2” for $305 million. to 625 million dollars.
Another significant accumulation in the analyst’s forecast is for “Deadpool
“The combination of continued percentage gains from the post-pandemic market and the concentration of IMAX and other premium displays relative to their peers deserve to help the corporate counterattack overcome headwinds in the workplace,” said would.
The analyst said AMC has a 51% market share of IMAX presentations in the United States.
The analyst highlights greater monetization of visitors and cost reduction control.
“We are confident that the improved balance sheet will improve the company’s position in its negotiations with creditors. “
Cinemark is upgraded through the analyst to an improved operational design and strict control controls.
“The controller most likely staffed theaters and reduced operating expenses in anticipation of those trends, and we don’t think the weaker-than-expected effects surprised the controller,” he said.
The analyst said the strong functionality of “Inside Out 2” could lead to higher margins for movie theater inventory.
Wold said movie theater stock valuations will move into 2025, with Cinemark shares undervalued by investors.
The analyst said Imax displays accounted for about 4. 5% of the domestic market over the past two years, compared to about 3. 3% of the market share during the two years before the pandemic.
“We believe that moviegoers’ preference for gravitating toward high-end theaters demonstrates a preference for escaping streaming platforms, for watching blockbuster movies during the first release window, and for watching them in the most productive way imaginable,” said would.
The analyst also said that the accelerated installation of new Imax displays in the second half of 2024 could reduce the stock.
B. Riley on MCS: The analyst lowers Marcus Corporation’s second-quarter and full-year estimates and sees several reasons for optimism.
The analyst said Marcus could play a role in getting underperforming movie theaters from similar companies.
“I think the hotel segment is maintained thanks to investors. “
B. Riley on NCMI: The movie advertising company also sees its analyst estimates revised downward for its second-quarter results. The analyst highlights some positive aspects for the company in the new note.
“The continued gains in ad budget percentage and good luck expanding monetization for participants in recent quarters deserve to help companies counter overall headwinds in the workplace,” said would.
Image created with Midjourney synthetic intelligence.