Movie theater chains Cinemark and AMC Entertainment saw a boost from the Independence Day holiday weekend. Cinemark stock received an upgrade and a sizable price hike Sunday. Meanwhile, AMC on Monday announced strong July 4 traffic, driven by the release of "Despicable Me 4." AMC stock and CNK rose early Tuesday following their Monday gains.
B. Riley analyst Eric Wold on Sunday upgraded Cinemark stock to buy from neutral and hiked its price target to $27 from $16. The note said the researcher underestimated the potential for Cinemark shares to "push through any concerns" this year with investors focused on a potential box office rebound in 2025. B. Riley pointed to a combination of overall post-pandemic market share gains and a movie slate that may favor regional demographics, which should help Cinemark counter overarching box office headwinds. However, Cinemark is not immune to overall industry weakness from strike-fueled film disruptions and a handful of disappointing releases, Wold added. He sees further upside for the stock with a focus on 2025 as the industry recovers and moviegoers seek out premium experiences.
Box Office Performance
However, overall Q2 2024 domestic box office performance missed expectations, according to B. Riley. Domestic box office revenues for the quarter came in at roughly $1.95 billion, falling 27% year-over-year and well below the firm's forecast of $2.35 billion.
Second-quarter box office revenue was also down from the better-than-expected Q1 performance, and was only about 60% of Q2 2019 levels, prior to the coronavirus pandemic. Wold noted that recent releases "Furiosa: A Mad Max Saga," "IF," and "The Fall Guy" all disappointed at the box office.
B. Riley is slightly more optimistic about Q3 and Q4, but lowered its 2024 box office projection to $8.2 billion from $8.5 billion. Wold said B. Riley remains "extremely positive" about a rebound in 2025 due to a strong movie lineup and delayed titles from 2024. Still, the firm lowered its 2025 box office estimates to $9.7 billion from $9.9 billion.
AMC Stock Rises On Strong July 4 Sales
Elsewhere, AMC Entertainment on Monday announced that more than 4 million moviegoers attended a flick at AMC during the extended Independence Day weekend from July 3 to July 7. The holiday showings marked AMC's busiest domestic Wednesday-through-Sunday period so far this year. The July 4 traffic surpassed AMC's previous 2024 weekend record of 3.8 million visitors from June 13 to June 16.
On July 3, AMC recorded its highest food and beverage revenue on a Wednesday since 2020, and marked the company's third-highest food and beverage sales on a Wednesday in company history.
AMC credited the Independence Day success to the July 3 release of the "Despicable Me 4" film, which reportedly opened with more than $120 million in sales over the five-day period. Meanwhile, Disney's "Inside Out 2" continues its summer success in theaters. The animated film has grossed nearly $534 million at the domestic box office since its June 14 release. Disney on June 30 said "Inside Out 2" surpassed the $1 billion mark globally, making it the fastest animated film to do so.
AMC during its Q1 results on May 8 said it is excited about the film lineup for the second half of 2024, which should carry into 2026. AMC attendance in Q1 fell 2.1% to 46.63 million patrons, driven by a 5.8% decline in U.S. traffic.
Wold of B. Riley on Sunday noted that AMC's recent balance sheet moves and maturity negotiations with debt holders will be key drivers of AMC stock performance.
Cinemark, AMC Stock
Cinemark climbed about 1% early Tuesday after the stock on Monday rose 0.5%. Shares are facing resistance around 22 after breaking out from a double-bottom base in mid-June.
CNK stock is trading modestly above its 10-day moving average. Cinemark rallied 56.4% so far this year.
AMC stock ticked up slightly Tuesday morning. Shares leapt 8.3% Monday on the back of its announcement. AMC retreated 9.8% in 2024 despite its meme stock-fueled boost from May.
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