Cinemark stock has risen after a double-upgrade from Roth MKM analyst Eric Handler that cited strong Hollywood box office expectations and debt reduction options.

Shares in Cinemark rose by 62 cents, or just over 3 percent, to $20.20 in pre-market trading on Monday after Handler upgraded his stock rating to buy from neutral and increased his price target to $26 from $19.

After Pixar’s Inside Out 2 continued to impress with its second weekend cinema ticket sales of $100 million domestically, the Roth MKM analyst forecast a cyclical upturn for Cinemark from improved box office coming out of the dual Hollywood strikes last year.

“We are increasingly optimistic about upcoming box office releases, especially the big ‘mega-franchises’ slated in 2025/2026. Headwinds from Hollywood’s 6-month work stoppage in 2023 that weighed on the 1H24 release slate are easing,” Handler wrote in June 24 investors note.

Domestic movie ticket sales haven’t come near to pre-COVID levels in recent quarters, the analyst conceded, but Handler predicted box office will turn up by the end of the year.

“Monthly revenue should turn positive in September and remain strong throughout 4Q, where we forecast 27 percent growth driven by blockbuster titles such as Joker: Folie a DeuxVenom: The Last DanceGladiator 2Moana 2Wicked, and Mufasa: The Lion King,” the investor note argued.

Then domestic box office could reach $9.4 billion in 2025, up on the 2024 outlook, and top $10 billion in 2026, as mega-franchises like Avatar 3 and Marvel titles next year and 2026 releases like Super Mario Bros.Avengers, two Star Wars movies, Toy StoryThe Batman and Lord of the Rings in 2026 are in the pipeline.

Handler also likes Cinemark’s debt options, which he put at $2.51 billion in borrowings currently. He sees Cinemark potentially using cash on hand to pay down $460 million in convertible notes coming due in August 2025 to take total debt down to pre-pandemic levels and allow a possible return of a stock dividend or share buybacks.



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