Investors are mixing exhibition stock picks with their Oscar picks today: Share prices for Regal, AMC Entertainment, Cinemark, IMAX, and RealD touched 52-week highs following several better-than-expected earnings reports for Q4, and surprisingly strong sales in Q1 for films including American Sniper, Fifty Shades Of Grey, and SpongeBob Movie 2.
“Given this year’s promising slate and already stronger than expected 1Q box office, we believe that this past quarter’s strong performance could be a hint of what’s to come in the year ahead,” MoffettNathanson Research’s Robert Fishman says.
Companies also have their idiosyncratic stories, such as the one IMAX told this morning when it reported impressive Q4 numbers — which helped to boost the stock about 5% in afternoon trading. Execs say that they anticipate no slowing in their expansion efforts in China. They also reiterated their plan to take more chances in scheduling films in weeks when it doesn’t have an obvious blockbuster for fanboys and fangirls and to increase their focus on marketing.
The disclosure that IMAX has content lined up for all but one week this year “demonstrates the increasing value of the IMAX format to studios and their desire to lock-in slots well ahead of time (with studios also clearly willing to move release dates),” says B. Riley’s Eric Wold who lifted his IMAX stock price target 11.5% to $43.50.
CEO Rich Gelfond also told analysts that IMAX is about to introduce its new laser projectors and upgraded, 12-channel sound systems at some of its biggest venues. The projectors provide “unprecedented sharpness and detail [as well as] an expanded color gamut…This technology is a giant leap forward in cinema presentation.” The company will hold an investor day presentation in LA in June.
IMAX follows Cinemark’s upbeat Q4 presentation last night, showing particular strength in concession sales (up 7.5% per patron vs the year end period in 2013), and in Latin America.