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Cinemark’s price target raised as forex head-winds dissipate
Wedbush Securities has raised its price target for cinemas owner Cinemark Holdings Inc (NYSE:CNK) as foreign exchange movements finally start to work in its favor.
The broker noted that currency movements had weighed on average ticket receipts and takings from the concession stand over the past several quarters, thanks to around 30% of the group’s revenues coming from abroad.
The forex head-winds had offset strong results, but it now appears that those head-winds are turning into tail-wins, as Latin American woes begin to dissipate.
The broker expects Cinemark to report a 4.4% increase in domestic admissions revenue per average screen in the first quarter, in line with the industry.
It thinks a 6% year-on-year increase in attendance will offset a 1.4% decrease in the average ticket price.
“Cinemark has not yet begun raising prices on upgraded screens,” Wedbush noted.
Forecasts for the current year have been adjusted, with the revenue estimate nudged up to US$3.15bn from US$3.13bn, and adjusted underlying earnings (EBITDA) increased to US$773mln from US$752mln.
The forecast for earnings per share has been hiked two cents to US$2.24.
The changes reflect higher domestic box office takings, partially offset by more challenged international admissions on difficult comparatives, and lower film rent.
Wedbush stuck with its ‘neutral’ rating but raised the 12-month target price to US$45 from US$43.
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/176173/cinemark-s-price-target-raised-as-forex-head-winds-dissipate-176173.html
