Cinemark Shares Lifted to Buy on Hope for Return to Theaters

Cinemark shares were higher on Thursday as an analyst suggested moviegoers would return to theaters as the pandemic's influence eases.
Author:
Publish date:

Cinemark Holdings  (CNK) - Get Report shares were higher Thursday after a Benchmark analyst lifted his rating on the movie chain to buy from hold with an $18 share price target.

Analyst Michael Hickey said film lovers would return to the cinema as the coronavirus's influence subsides.

In addition, New York Gov. Andrew Cuomo told WAMC radio in Albany, N.Y., the state capital, that movie theaters could be the next business to reopen in the state, the New York Post reported.

Shares of Cinemark were up 7.2% to $11.95, while AMC Entertainment Holdings  (AMC) - Get Report was up 0.3% to $5.41.

Hickey said he expected moviegoers to return to the cinema, driven by a strong slate of films in the near future, a shift toward normalcy as the outbreak's influence subsides, and an elevated need for escapism.

Hickey also said he was optimistic that Cinemark, Plano, Texas, could return to historical performance levels over the medium term.

In April, in response to social distancing requirements, Cinemark said it was laying off more than 17,500 of its hourly theater employees in the U.S., while furloughing half its corporate employees at 20% of salary with full benefits. The other half of corporate staff in the U.S. saw their salaries halved.

AMC Entertainment is slated to begin its phased reopening today and mark its centennial anniversary by charging the 1920 ticket price of 15 cents a ticket. The Leawood, Kan., movie chain also seeks to emerge from the coronavirus pandemic shutdown.

Meanwhile, Cuomo said during the Wednesday radio interview that “movie theaters, I think, are next" to reopen. “[They] are a situation that we have to attend to," Cuomo said.

On Monday, Cuomo said movie theaters would remain closed indefinitely in New York because cinemas are less essential and come with a higher risk of virus transmission among patrons.