The Knoxville, TN-based company operates a movie theater chain in the U.S.
"We believe that RGC's accelerated premium offering-driven growth, while compelling, is largely priced in, and also have limited visibility on other potential growth drivers as compared with peers," the firm said in an analyst note.
After lagging behind AMC Entertainment (AMC) in its introduction of premium offerings, Regal is significantly accelerating its rollout with 185 locations with expanded food menus and 135 locations with alcohol by the end of the year, Credit Suisse noted. This would put Regal ahead of AMC by count.
The upgrades should grow admissions per average screen at the group level, but the firm also sees headwinds to the margin profile concessions compared to those of traditional offerings such as popcorn, soda and candy.
Shares of Regal closed down by 1.32% to $17.25 on Friday.
Separately, TheStreet Ratings Team has a "hold" rating with a score of C on the stock.
The primary factors that have impacted its rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its revenue growth.
At the same time, the team also finds weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: RGCRGC data by YCharts