skynesher
Cinemark Holdings (NYSE:CNK) fell 2.3% in premarket trading on Wednesday after getting downgraded on a negative box office outlook.
Wells Fargo dropped its rating to Underweight from Equal Weight saying that Wall Street estimates for the company are too high. The bank lowered its price target on the stock to $13 from $16.
The firm set its box office forecast at $8.1B, 8% below the Street high expectation of $8.8B
Shares of Cinemark (CNK) are down 12% since early November and “there's still incremental risk from estimate revisions + a weak slate through the beginning of '24.”
Global box office sales are expected to tumble next year after strikes in Hollywood forced companies from The Walt Disney Company (DIS) to Warner Bros. Discovery (WBD) to delay the release of several films. Global movie ticket sales are expected to reach $31.5B in 2024, 5% below the expected finish for 2023 and 20% below pre-pandemic figures, according to Gower Street Analytics.
The North American market is anticipated to finish 11% down in 2024 from 2023 at about $8B, a 30% drop against the 2017 to 2019 average, Gower said.
Wells Fargo’s $8.1B estimate puts it 29% below 2019 levels.
“We think there could be risk to our unannounced films estimate of $1.5bn on the likelihood of fewer films being added to the slate vs '23 due to strikes,” analysts led by Omar Mejias said.
The stock has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Seeking Alpha's quant system, which consistently beats the market, rates the stock a BUY.