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UPDATE: Wunderlich Remains Positive on Cinemark After Acquisition

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Wunderlich Securities published a positive report Tuesday on Cinemark (NYSE: CNK) that maintained its Buy-rating and $34 PT.

Cinemark's sale of its 290 Mexican screens to Grupo Cinemex will not significantly hamper the company's Latin American presence, wrote Wunderlich.

In the report, Wunderlich wrote, "The sale eliminates only $16.3mm of LTM 9.30.12 EBITDA, or sub 10% of CNK's Latin cash generation, and allows focus on higher growth markets with higher ROI capital redeployment. The sale price and multiple were not disclosed but we suspect a sub six exit multiple given the desire to avoid stranded capital on any Mexican screen reinvestments, especially with 100-150 anticipated new 2013 CNK Latin screens," Wunderlich says. "We estimate that Cinemark's stock price, among other possible combinations, now implicitly discounts flat annual LatAm attendance per screen growth with 1% annual U.S. declines."

Cinemark closed Friday at $29.42.

Latest Ratings for CNK

DateFirmActionFromTo
Sep 2014Morgan StanleyMaintainsEqual-weight
Sep 2014Stifel NicolausUpgradesHoldBuy
Aug 2014WunderlichMaintainsBuy

View More Analyst Ratings for CNK
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Posted-In: Wunderlich SecuritiesAnalyst Color Reiteration Analyst Ratings

 

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