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With Venom: Let There Be Carnage‘s opening of $90.1 million leading the domestic box office to hit its biggest weekend since COVID-19 shut down cinemas and James Bond title No Time to Die hitting records in international markets, Wall Street analysts touted the outlook for exhibition industry on Monday.
The strong Venom launch meant that, for the first time during the pandemic, domestic box office revenues came in less than 15 percent behind the comparable weekend in 2019.
No surprise then that MKM Partners analyst Eric Handler used the title “A Global Surge, Upcoming Releases Point to A Potential Inflection Point” for his Monday note to investors, noting: “Hollywood rejoices: The box office recovery takes a big step forward with a strong slate of releases waiting in the wings.”
Handler highlighted that the combination of the Venom and Bond releases and China’s The Battle of Lake Changjin — which earned $235 million in the country from Thursday to Sunday — “produced what we believe is the highest-grossing weekend of the pandemic.” And he lauded “big turnouts all over the world.”
Concluded Handler: “With upcoming movies no longer getting pushed back and hybrid releases becoming less of a factor, the industry has a reason for being increasingly optimistic towards a recovery heading into the fourth quarter of 2021 and with 2022 looking just three months away.”
Meanwhile, B. Riley analyst Eric Wold reiterated his “buy” on the stocks of Cinemark, Marcus Corp., Imax and National Cinemedia, along with a “neutral” on AMC Theatres. His takeaway in the title of his report was: “Venom 2 Domestic Opening and 007 Overseas Results Show That the Exhibitor ‘Carnage’ Is in the Past.”
Wold argued that the “stronger-than-anticipated opening weekends” in the U.S. for Venom and overseas for No Time to Die “should only help to provide another outlook boost for the group after the impressive run for the stocks over the past few weeks.” And the Wall Street analyst argued that moviegoers are “at the point where they will push through” any headwinds, such as delta variant concerns, “if the film slate is strong enough and studios hold the line with the release calendar.”
Wold concluded that this makes it “increasingly likely (that a) pre-pandemic box office returns in 2022,” even though his financial models currently assume that domestic attendance in 2022 comes in about 15 percent below 2019 levels, which the analyst said “is increasingly looking overly conservative considering individual film performances, the impressive slate on the horizon and the attendance trends we have seen with the regional theme parks.”
Wold noted how well the group has done since Disney last month said it would use an exclusive theatrical release window for its remaining movies this year. That means that exhibition stocks the analyst covers have risen by an average of about 19 percent, or 29 percent when excluding the more volatile AMC, in recent weeks, compared with a decline of 2 percent for the broad-based S&P 500 stock index.
As of 11:30 a.m. ET, Cinemark’s stock was up 6.3 percent to $21.18, Marcus shares were up 3.5 percent at $18.57, and Imax was up 2.3 percent at $20.17. But AMC was down 3.9 percent at $36.96 and Regal owner Cineworld’s stock in London was down 3.6 percent.
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