Cinemark's Summer Releases Are Coming, Analyst Sees A Balance In Risk And Return

Credit Suisse analyst Douglas Mitchelson reiterated a Neutral rating on the shares of Cinemark Holdings Inc CNK with a price target of $14.
The company reported 1Q revenue and EBITDA nicely ahead with beats in both domestic and international box office results.
The management pointed out that the y/y decrease in film rentals and advertising expense was due to lower marketing as they tend to budget investments against expected box office and returns, noted the analyst.
The analyst also opined that with the box office outperformance, marketing spend was lower than what it otherwise would have been.
The analyst now estimates total revenue in 2Q23 to be $903 million, up $48 million from the previous forecast. The adjusted EPS estimate has also been raised to $0.81 from $0.44.
With most of the recent positive box office results being already captured by CNK’s year-to-date stock outperformance, key remains how much further theaters can recover post-COVID both in film volumes and in box office per film, said the analyst.
With the largely fixed film release schedule providing more visibility into the rest of 2023, the analyst sees CNK’s risk and return being balanced at this point.
Price Action: CNK shares are trading higher by 2.01% at $16.47 on the last check Monday.

Momentum88.09

Growth69.34

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