Why Regal Entertainment (RGC) Stock Is Gaining In Pre-Market Trading Today

NEW YORK (TheStreet) -- Shares of Regal Entertainment Group (RGC) are higher by 3.50% to $19.50 in pre-market trading on Thursday after a ratings upgrade to "buy" from "hold" at Topeka Capital.

The firm upgraded the movie theater company's rating reviewing the expected 2015 film slate and saying it looks "simply spectacular."

Topeka raised its price target on Regal to $23 from $19.

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Separately, TheStreet Ratings team rates REGAL ENTERTAINMENT GROUP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate REGAL ENTERTAINMENT GROUP (RGC) 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. Among the primary strengths of the company is its revenue growth. 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:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.7%. Since the same quarter one year prior, revenues rose by 13.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • REGAL ENTERTAINMENT GROUP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, REGAL ENTERTAINMENT GROUP increased its bottom line by earning $1.00 versus $0.93 in the prior year. This year, the market expects an improvement in earnings ($1.16 versus $1.00).
  • The gross profit margin for REGAL ENTERTAINMENT GROUP is rather low; currently it is at 19.25%. Regardless of RGC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RGC's net profit margin of -0.16% significantly underperformed when compared to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 105.3% when compared to the same quarter one year ago, falling from $22.50 million to -$1.20 million.
  • In its most recent trading session, RGC has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Despite the decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.
  • You can view the full analysis from the report here: RGC Ratings Report
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