Why Did B.Riley FBR Downgrade Marcus Corp’s Stock?

Marcus Corp (NYSE: MCS) received a Hold rating and a $41 price target from B.Riley FBR analyst Eric Wold today. The company’s shares closed yesterday at $40.20, close to its 52-week high of $40.45.

Wold observed:

“Corporation (MCS) have significantly outperformed both the overall stock market and the rest of our exhibitor coverage universe group, so far this year, with shares now only ~2% away from our reduced PT, after we had raised our PT multiple times in recent weeks. Additionally, with an inability to justify any higher valuation multiples, given potential headwinds for both the Theatres and Hotels/Resorts segments over the next 12–18 months, we downgrade and reduce our to $41.”

According to TipRanks.com, Wold is a 5-star analyst with an average return of 9.9% and a 60.9% success rate. Wold covers the Services sector, focusing on stocks such as Reading International Inc, Cinemark Holdings Inc, and National Cinemedia.

Currently, the analyst consensus on Marcus Corp is a Moderate Buy with an average price target of $42.50.

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Based on Marcus Corp’s latest earnings release for the quarter ending June 30, the company reported a quarterly net profit of $18.62 million. In comparison, last year the company had a net profit of $10.12 million.

Based on the recent corporate insider activity of 54 insiders, corporate insider sentiment is negative on the stock. Earlier this month, Rolando Rodriguez, the Pres. & CEO – Marcus Theatres of MCS sold 4,125 shares for a total of $159,308.

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Marcus Corp. engages in operating movie theatres, hotels, and resorts. It operates through the following business segments: Theatres, Hotels & Resorts, and Corporate Items. The Theatres segment includes multiscreen motion picture theatres and a family entertainment center. The Hotels & Resorts segment owns and operates full service hotels and resorts.