UPDATE: Stifel Nicolaus Downgrades Regal Entertainment Group to Hold
Stifel Nicolaus has published a research report on Regal Entertainment Group (NYSE: RGC) and has downgraded the company from Buy to Hold.
In the report, Stifel Nicolaus writes, "We are lowering our rating on Regal from Buy to Hold and establish a fair value estimate in the $13-$14 range. The 4Q11 box office for Regal's calendar quarter (ended December 29) was -6.4% weaker than our already revised downward -3% expectation. Furthermore, with few strong December titles, there is little spill-over to help jump start 1Q12 past this past weekend. As we noted earlier, in 2011 sequels were very weak (-17% across all genres from their predecessors) and with 25 sequels in 2012, we see sequel fatigue continuing into next year, muting growth. Supporting the stock is that the dividend is only 70% of FCF capex continues to decline and the operational improvements at Regal continue. This rating change largely reflects a view that North American exhibitors will see limited growth and our exhibition Buy ratings are attached to names with international exposure."
Stifel Nicolaus has also removed its $16 price target on Regal Entertainment Group, which is currently trading down $0.26 from Friday's $11.94 closing price.
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