Recent Pullback Sets Up Cinemark For A Blockbuster Entry Point

Cinemark Holdings, Inc. CNK's nearly 11-percent decline over the past three months is setting up a nice entry point for investors, according to a new analyst report.

Wedbush upgraded its rating on Cinemark from Neutral to Outperform, citing the recent pullback “provides a compelling entry point."

Analyst Michael Pachter believes Cinemark is poised for future growth due to an expanding domestic and international footprint, improving metrics on continued theater upgrades, easing currency headwinds and a reversal of recent weak box office trends.

“We think shares will rebound to historic trading multiples with strong box office in Q4, and the current share price provides a compelling entry point for investors,” Pachter said.

While summer box office numbers have been disappointing relative to initial expectations, if and when they do rebound, Cinemark will be positioned well to see share appreciation.

“Cinemark’s industry-leading utilization rate, and its industry leading EBITDA margins gives us confidence in its ability to withstand the storm,” Pachter said.

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