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Loop Capital On Theater Stocks: Positive On 2, Neutral On Another

Loop Capital On Theater Stocks: Positive On 2, Neutral On Another

In a review of three theater names, Loop Capital analyst David Miller picked up two stocks and remained Neutral on another.

The brokerage likes Cinemark Holdings, Inc. (NYSE: CNK) and AMC Entertainment Holdings Inc (NYSE: AMC) and initiated them both at Buy. The analyst kept a price objective of $44 on Cinemark and $35 on AMC shares. Regal Entertainment Group (NYSE: RGC) shares were rated with a Hold rating and a price tag of $22.

On Cinemark, the brokerage believes the company enjoys "the highest quality name in the exhibition sub-space," citing that it offers everything an investor is looking for. This included effective cost management, demand curves, industry-leading margins, strong dividend and a stable management.

Related Link: Loop Capital Says AMC Should Trade At A Premium To Regal

The analyst expects AMC Entertainment to trade at a premium, if Regal shares trade at 9.0X expected EBITDA, citing the higher power related to the domestic screen count, which hit 8,380 due to the acquisition of Carmike. On the international screen count also, it hit 2,236 following the 12 acquisition of Odeon-UCI, which is the biggest European operator.

As far as Regal Entertainment shares are concerned, the brokerage believes the stock is fairly valued, despite offering an attractive yield of 4.10 percent. "That said, we see getting more constructive on RGC if (or when) management decides to diversify its revenue base overseas, and/or there is some sort of 'black swan' event which forces investors to favor defensive plays, which RGC is in our view," the analyst said.

At Time Of Writing...

  • AMC was up 0.81 percent at $29.99.
  • Cinemark was trading at $38.60, up 1.85 percent.
  • Regal Entertainment was up 0.56 percent at $21.59.

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Latest Ratings for CNK

Sep 2019MaintainsBuy
Jul 2019MaintainsEqual-Weight
Jul 2019Initiates Coverage OnOutperform

View More Analyst Ratings for CNK
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