UPDATE: Wunderlich Remains Positive on Cinemark After Acquisition
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
|Sep 2014||Morgan Stanley||Maintains||Equal-weight|
|Sep 2014||Stifel Nicolaus||Upgrades||Hold||Buy|
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