Shares of Cinemark Holdings (CNK) jumped 11.2% on Thursday after Benchmark upgraded the stock to Buy from Hold. The firm kept the price target unchanged at $18 (45.2% upside potential).
Benchmark analyst Michael Hickey raised its rating on Cinemark Holdings’ stock on the hope that moviegoers would return to theaters driven by a strong slate of movies in the near future and a shift to normalcy as the COVID-19 cases subside. He is “optimistic that Cinemark can return to historical performance levels over the medium-term.”
Lockdown measures implemented by the government across the world to contain coronavirus have been hurting the theater business severely. On August 4, Cinemark reported that 2Q revenues fell 99% to $9 million year-on-year. The company recorded a net loss of $1704 million or $1.45 per share, compared with net income of $101.9 million or $0.86 per share in the year-ago quarter.
Cinemark’s CEO Mark Zoradi said, “While our company and industry continue to be significantly impacted by the coronavirus pandemic, our team has been working diligently to prepare for reopening our theatres within this new operating environment.” The company has planned to reopen theaters in a phased manner from August 21. (See CNK stock analysis on TipRanks).
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 5 Buys and 5 Holds. The average price target of $16.70 implies upside potential of about 34.7%. Shares are down 63% year-to-date.
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