In a report released today, Alicia Reese from Wedbush reiterated a Buy rating on Cinemark Holdings (CNK – Research Report), with a price target of $20.00.
Alicia Reese has given her Buy rating due to a combination of factors surrounding Cinemark Holdings’ performance and strategic positioning in the industry. Despite facing a challenging period marked by a slowdown in box office performance due to the SAG-AFTRA strike, Reese believes that Cinemark is well-equipped to outperform its peers. She highlights the company’s ability to draw its substantial loyalty member base to theaters and generate higher concession sales as key strengths. Additionally, Reese is optimistic about Cinemark’s initiatives to maintain its financial health by preserving cash, shoring up its balance sheet, and investing in its circuit, with expectations of reinstating dividends once the temporary industry headwinds subside.
The analyst’s confidence in Cinemark is further bolstered by the company’s potential for recovery once the box office regains consistency, anticipated later in the year. The reinstatement of dividends is expected to propel the stock towards its historical valuation range. Reese’s outlook is also supported by raised Q4 revenue and EBITDA estimates, surpassing previous expectations, and an encouraging performance against industry trends. Looking forward, she sees opportunities for growth, particularly with the release of local content in international markets like Brazil. Reese’s $20 price target reflects a 7x EV-to-EBITDA multiple based on projected earnings for FY:25, suggesting a favorable risk-reward scenario for investors.
In another report released on January 29, Macquarie also maintained a Buy rating on the stock with a $20.00 price target.
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Cinemark Holdings (CNK) Company Description:
Cinemark Holdings, Inc. is a holding company, which engages in the provision of motion picture exhibition through its subsidiaries. It operates through the U.S. and International segments. The company was founded by Lee Roy Mitchell in 1984 and is headquartered in Plano, TX.
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