Cinemark Holdings (CNK – Research Report), the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst Stephen Laszczyk from Goldman Sachs maintained a Sell rating on the stock and has a $13.00 price target.
Stephen Laszczyk has given his Sell rating due to a combination of factors that suggest potential challenges for Cinemark Holdings going forward. Despite Cinemark’s fourth-quarter earnings surpassing expectations with higher revenue and adjusted EBITDA, the positive aspects like increased average ticket prices and concessions per capita, mainly from concert-movies, and market share outperformance, are tempered by longer-term concerns.
The Sell rating primarily stems from a less optimistic view regarding the recovery timeline for the domestic box office, with expectations that it will not return to pre-pandemic levels until around 2026, later than previously thought. Additionally, there are apprehensions about the ability to sustain pricing and concession growth into 2024 due to a less favorable film slate mix, and limited opportunities for market share gains amidst rising competition. These factors contribute to the anticipation of downside risks to Cinemark’s EBITDA and Free Cash Flow in the coming years.
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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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