Research firm B. Riley cut its ratings on three movie theater companies to Neutral from Buy, saying that it "remains concerned" about the sector's difficult second quarter comparisons while noting that the stocks have risen sharply in recent weeks. AMC Entertainment (AMC - Get Report) , Cinemark (CNK - Get Report) , and Regal Entertainment (RGC) are the three movie theater owners that were downgraded by the firm.

WHAT'S NEW: Movie theaters face a difficult comparison in Q2, wrote B. Riley analyst Eric Wold. Their total box office revenue will drop over 10% in the quarter compared to the same period of last year, he forecast. Meanwhile, theater owners' stocks have jumped 31% since B. Riley urged investors to buy their shares, Wold pointed out. The stocks will probably reach more attractive entry points in coming weeks as investors begin to focus more on the sector's 2017 outlook, he stated.

WHAT'S NOTABLE: Another research firm, Cowen, believes that the film industry's outlook is becoming "increasingly dire," Variety reported on March 4. Too many studios are making too many mediocre films that are cannibalizing each other, and fewer hit films are being made, Cowen told investors previously, according to the magazine.

PRICE ACTION: In late morning trading, AMC fell 1.9% to $28.40, Cinemark dropped 1.9% to $35.86 and Regal slipped 0.7% to $21.40.

OTHERS TO WATCH: Publicly traded companies involved in filmmaking include 21st Century Fox (FOX) (FOXA) , Comcast (CMCSA - Get Report) (CMCSK) , Disney (DIS - Get Report) , Lionsgate (LGF) , Sony (SNE - Get Report) , Time Warner (TWX) , and Viacom (VIA - Get Report) (VIAB - Get Report) .

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