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Is Imax Losing Its Edge In A Changing Movie Industry? Piper Jaffray Downgrades On Multiple Stock Pressures

Is Imax Losing Its Edge In A Changing Movie Industry? Piper Jaffray Downgrades On Multiple Stock Pressures

While Imax Corp (USA) (NYSE: IMAX) may have had some differentiating advantages that gave it a competitive edge in a changing movie business, this may no longer be the case, according to Piper Jaffray. 

The Analyst

Piper Jaffray's Stan Meyers downgraded Imax's stock rating from Overweight to Neutral with a price target slashed from $28 to $21.

The Thesis

Imax faces pressure on six different fronts that drove Piper Jaffray's downgrade, Meyers said in a research report. (See the analyst's track record here.) 

They are: 

  • Expectations for "major estimate revisions" for Imax's fourth quarter to the downside.
  • The ongoing loss of casual fans of Imax's offerings.
  • Continued declines in per-screen averages in China.
  • A lack of new initiatives like virtual reality.
  • The absence of an upgrade option on MoviePass for Imax.
  • Expectations for a meaningful deceleration in the top line.

Looking forward to the full year 2018, Meyers said he sees "limited" box office growth despite a film slate loaded with Imax-friendly films. The company is now expected to earn 88 cents per share in fiscal 2018 on revenue of $360.1 million versus the analyst's prior estimate of $1.18 per share on revenue of $400.7 million. The Street's estimate stands at 95 cents per share on revenue of $404.6 million.

Price Action

Shares of Imax were trading flat at $20.45 late in Wednesday's trading session. 

Related Links:

Should You Get Rid Of Imax Corporation Now?

3 Reasons To Own IMAX Shares For The Long Term

Latest Ratings for IMAX

Jul 2020MKM PartnersMaintainsBuy
Apr 2020BenchmarkUpgradesHoldBuy
Apr 2020WedbushDowngradesOutperformNeutral

View More Analyst Ratings for IMAX
View the Latest Analyst Ratings


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