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Cinemark Stock Rises on Outperform Upgrade from Credit Suisse

Cinemark is 'the best positioned U.S. pure play theater operator,' say Credit Suisse analysts, who upgrade the company to outperform.
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Cinemark Holdings  (CNK) - Get Cinemark Holdings, Inc. Report got the star treatment from Credit Suisse Tuesday as an analyst upgraded the movie-theater chain operator to outperform from neutral and raised her price target to $25 from $16.

Shares of the Plano, Texas company closed 0.5% higher to $21.76 in premarket trading. At last check, the stock was up 1.15% in regular trading.

Analyst Meghan Durkin said in a research note that she views Cinemark as the best positioned U.S. pure play theater operator as the box office recovery "ramps up" into 2022, according to the Fly.

Cinemark has gained marketshare post-COVID, and given its affordable pricing and superior experience, the company's North American box office share should sustain at 14%, Durkin said.

Last week, Cinemark and AMC Entertainment  (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report said their October ticket sales were the highest for any month since February 2020.

Movie theaters were forced to close their doors in March 2020 due to the COVID-19 pandemic.

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On Friday, Cinemark reported a wider-than-expected third-quarter loss, but beat Wall Street's revenue forecasts.

The net loss came to $77.8 million, or 65 cents a share, compared with $147.6 million, or $1.25 a share, a year ago.The FactSet consensus called for a loss of 59 cents a share. Revenue soared to $434.8 million from $35.5 million.

"The fourth quarter has already started out strong as October delivered our best monthly box office results since the onset of Covid," CEO Mark Zoradi said during an earnings call with analysts. "Notably, our cash generation during the month of October was significant enough to more than cover all of our variable and all of our fixed costs."

AMC declined after the bell Monday even though the company reported higher third-quarter revenue and a smaller loss than analysts expected.

The nation's largest movie theater company reported a net loss of $905.8 million, or $8.41 a share for the same period in 2020, which reflected a devastating loss of business during the COVID-19 pandemic. 

At last check, AMC shares were down 8.97% to $41.02.