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“James Bond delivers to a hungry moviegoing audience,” B. Riley Financial’s Eric Wold wrote in a Monday report, in which he increased his stock price targets on key exhibitors and his earnings estimates for the second half of 2021.
“The Pandemic was ‘No Time to Die’ for Moviegoing,” he highlighted in the title of the report. “The underlying moviegoing demand levels (whether viewed as pent-up or getting back to normal) are clear with the global opening weekend results for both Venom 2 and No Time to Die — solid IP franchises with exclusive theatrical windows in place,” Wold wrote in the report.
Noting third-quarter box office in line with his original expectations and “stronger in-theater spending patterns, both for ticket prices and concessions,” he boosted his earnings estimates for AMC Theatres, Cinemark, Imax and Marcus Corp. for the period and the fourth quarter “on positive slate moves into the quarter and stronger-than-expected demand trends.”
Wold is also increasingly bullish on next year, writing: “We also believe this pushes a solid demand tailwind into 2022 and brings forward our expectation for a faster return to normal, as long as the studios continue to play ball.”
While he still assumes for now that both attendance and box office in 2022 will remain below 2019 levels, “we increasingly believe this is a conservative move as opposed to reality given the trends we are seeing in recent months, a film slate that is more likely to hold and the proof that exclusive theatrical windows work and draw moviegoers out of the home,” the analyst argued.
Exhibition stocks have done well since The Walt Disney Co. last month said that it would use an exclusive theatrical release window for its remaining movies this year. Since then, the cinema stocks Wold covers have increased by an average of 23 percent, he highlighted. “We would expect this positive momentum to drive valuation multiples back near pre-pandemic highs,” he concluded, raising price targets on some key stocks.
Wold pushed his Cinemark stock price target up by $3 to $31, with Marcus getting another $3 boost to $28 and Imax going from $28 to $30.
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