Regal Entertainment 'Minions Riding Shotgun' After Box Office Breakout, Wunderlich Says

In a report published Wednesday, Wunderlich analyst Matthew Harrigan reiterated a Buy rating and price target of $31 on

. The analyst expects the company to post high single digit growth for Q2. The analyst expressed optimism regarding the June box office close, given the 71.4 growth following the release of "Jurassic World" and "Inside Out," However, this weekend is likely to be more challenging, given the debut collections for "Transformers" in 2014. "We expect the carryover from Jurassic World and Inside Out to nullify Transformers, with upside from the HXS (Hollywood Stock Exchange) H$59.8mm anticipated opening for comedy Ted 2," Harrigan said. In addition, there is unlikely to be any cash distribution from NCM LLC during Q2 due to the expenses associated with the termination of the Screenvision merger. The analyst expects payments to resume in Q3, funded via NCM's revolving credit facility, "with the remaining negative amount to be netted against payments for Q2 2016 to be settled in Q3 2016." The analyst expects July comps to be very easy, with tougher comps in August. However, Q4 might be better, since it would include the holiday season, with some "promising" holiday 2015 products lined up, along with several major releases through the remainder of the year. Despite the Q2 box office recovery, the stock is trading 13 percent below its recent high, possibly due to the ongoing investigation into exclusive local film clearances by the Department of Justice.