JP Morgan Comments On Cinemark, Regal Entertainment Group Ahead Of Earnings Release
April 27, 2011 7:35 AM
JP Morgan reiterate its Overweight ratings on the movie theaters, Cinemark (NYSE: CNK) and Regal Entertainment (NYSE: RGC), heading into the prime spring/summer box office period, which has already seen an uptick in recent weeks after a dismal first quarter.
Box office gaining momentum into blockbuster season, with the last two weekends nicely positive, up 8% and 36%, respectively, thanks in part to strong family film performance from Hop and Rio which have both seen solid follow through after their opens. Regal will be first to report results this Thurs, Apr 28 after market close. The industry box office on Regal's fiscal basis fell approx. 19.6% in Q1, leading us to adjust RGC revenues accordingly, incl. the effect of roughly 1% fewer screens, to a total decline of 20%. JP Morgan's Q1 EPS and adj. EBITDA come down to $(0.03) and $83m, respectively, from $0.00 and $93m.
This robust LatAm performance should mitigate the weak domestic results. JP Morgan is slightly lowering its CNK Q1 EPS and adj. EBITDA to $0.14 and $93m, respectively, from $0.16 and $97m. So far in Q2, Latin America appears to be delivering very impressive growth, which it expects to continue.
JP Morgan has an Overweight rating on CNK and RGC and a $24 and $17 PT respectively
CNK closed Tuesday at $19.14
RGC closed Tuesday at $13.84
