NEW YORK (TheStreet) -- Cinemark Holdings (CNK) received an upgrade from JPMorgan to "neutral" from "overweight" on Monday. The investment bank justified the upgrade, noting recent stock movements have been an overreaction to the company's Latin American exposure.
In pre-market trading, shares are unchanged at $28.59. Year to date, the stock has crumbled 14.2%.
TheStreet Ratings team rates CINEMARK HOLDINGS INC as a Buy with a ratings score of B. The team has this to say about their recommendation:
"We rate CINEMARK HOLDINGS INC (CNK) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 19.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CINEMARK HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CINEMARK HOLDINGS INC increased its bottom line by earning $1.47 versus $1.14 in the prior year. This year, the market expects an improvement in earnings ($1.55 versus $1.47).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 68.9% when compared to the same quarter one year prior, rising from $47.39 million to $80.02 million.
- Despite the current debt-to-equity ratio of 1.86, it is still below the industry average, suggesting that this level of debt is acceptable within the Media industry. Despite the fact that CNK's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.71 is high and demonstrates strong liquidity.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Media industry and the overall market, CINEMARK HOLDINGS INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- You can view the full analysis from the report here: CNK Ratings Report