Cinemark Holdings double-upgraded at Wells Fargo on 'structurally better' demand
Investing.com | Author Sam Boughedda
Published Apr 05, 2024 15:26
Cinemark Holdings (NYSE:CNK) shares jumped Friday morning after the stock was double-upgraded to Overweight from Underweight at Wells Fargo. The firm also raised its price target for CNK to $23 from $13 per share.
The bank said it is raising its rating for the stock based on better tentpole performance, the de-risking of 2024, and its growing conviction on the company's performance in 2025.
"Q1 DBO came in 6% above our est. The beat wasn't on a breakout performance, instead, several films outperformed — a sign that consumer demand is robust with legs to next year," analysts at Wells Fargo explained.
The investment bank believes Cinemark has lots of operating leverage, and despite its year-to-date run (up more than 42%), the stock is "still inexpensive."
Analysts believe consumer demand is driving enduring results, and they see more films being announced. "We view demand as structurally better than expected, while studio content remains sound overall," said Wells Fargo.
At the time of writing, CNK shares are up 4.56% at $19.61 per share.
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