MKM Has Buy Rating On National CineMedia (NCMI)

MKM Partners has a buy rating on National CineMedia, Inc. NCMI and a $22 target after it reported earnings after the bell. In a note to clients, MKM writes, "We continue to hold a favorable view towards National CineMedia following 3Q10 results that well-exceeded our Street high expectations. Overall advertising growth of 33% was a result from strong pricing (+7% year over year) and record quarterly utilization of 122%. Advertising strength was broad, both on a national and local basis as well as across verticals. During the quarter, 11 new advertisers were added to the mix (39 YTD) as the in-theater medium continues to gain secular momentum. 4Q10 revenue guidance of roughly $113-$118 million was below expectations (consensus of $121mn), resulting from less than anticipated military ad spending, front-loaded content partner spending for 2010, and a lack of visibility into December utilization." Shares of NCMI gained 66 cents yesterday to close at $19.17, a gain of 3.5%.