Imax Shares Sink Despite 3D Screenings of 'Gravity'
Gravity hasn't kept Imax shares from falling.
The Warner Bros. film is generating tremendous buzz and early 3D screenings on giant Imax screens have yielded particularly impressive commentary. Fandango reports that 3D advance ticket sales for Gravity have been "stellar."
Still, Imax stock has sunk 14 percent so far this week as some analysts weigh in with negativity about the company, despite enthusiasm for Gravity, a special-effects laden space odyssey that stars Sandra Bullock and George Clooney opening Friday.
On Wednesday, Benchmark analyst Mark Hickey initiated coverage of Imax with a “hold rating” and $29.42 price target, which suggested no gain for the stock in the next year or so.
Shares dropped 4 percent Wednesday and another 9 percent Thursday. The stock closed at $25.96 Thursday after starting the week at $30.09.
Hickey’s analysis indicates a lack of optimism for Imax’s 2014 slate, even though it includes a slew of films based on known quantities, like Godzilla, I, Frankenstein and RoboCop. The analyst also is concerned that the growth of the footprint is slowing for Imax, which operates 767 theaters in 54 countries.
Also on Wednesday, Michael Pachter of Wedbush lowered his price target on Imax to $28 a share because of what he sees as weaker-than-expected results in the just-ended third quarter, which included such films as Elysium, Riddick and Pacific Rim.
The analyst, however, left his fourth-quarter estimates intact because of Gravity, “which should benefit from outstanding reviews,” he said.
Pachter, in fact, says his fourth-quarter estimates might be conservative. He sees Gravity performing well, then a lull, then strong results toward the end of the quarter with The Hunger Games: Catching Fire and The Hobbit: The Desolation of Smaug.
Like Hickey, Pachter also warns of slow expansion, writing: “Despite an increasing backlog and a consistent stream of high-profile theater-signing announcements, management appears content with a slow installation pace that limits long-term growth.”
A Gravity Imax trailer is below.