The price target increase was due to the company's announcement yesterday that its subsidiary, IMAX China, filed an application for an IPO in Hong Kong, according to the analyst note. This announcement came earlier than analysts had expected.
The IPO could occur over the next two to four months, according to public documents related to the Hong Kong Stock Exchange, analysts said.
However, there are a few remaining questions to be answered. It is uncertain as to the exact share IMAX intends to divest but suspect it is very much linked to the final valuations, analysts noted. Second, the issue of repatriating cash is also unclear at this stage, and last, the issue of use of proceeds is also uncertain.
Shares of IMAX are falling by 1.15% to $39.54 in Friday's early morning trading session.
Separately, TheStreet Ratings team rates IMAX CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate IMAX CORP (IMAX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income."