The summer swoon in exhibition stocks continues today after a fan of the business, Wedbush Securities’ Michael Pachter, lowered his box office outlook for the year.

“Driven by the weak summer release slate and a conservative assumption that
the film slate will continue to be soft, we reduced our domestic box office estimates
for Q3 to down 8.0% from up 0.2%, and for Q4 to up 6.0% from up 11.3%,” he says this morning.

He blames Hollywood. Consumers “are driven to the theaters by compelling content, and this summer has largely been lacking,” he says.

He adds that “the release slate has flattened, with content being successfully pushed into previous ‘shoulder periods’.”

The bottom line: Pachter reduced his 12-month price target for AMC Entertainment by 10% to $36 a share, dropped Regal 11.5% to $23, Imax 10.3% to $35, and Cinemark by 8.3% to $44.

In an otherwise flat day in the markets, the two biggest chains are down in early trading with Regal -1.4% after touching a new 52-week low, and AMC -1.1%.  Cinemark rebounded to +0.2%, while Imax is +0.7%.

Pachter believes that Wall Street has punished exhibition chains too much.

Bears say that the weaker-than-expected box office sales in Q2 show that consumers are losing interest in movie going. What’s more, they say, demand may continue to weaken as Netflix offers its original movies online, and if studios begin to offer premium video on demand — offering new movies to home viewers in the 90 day period when theaters usually have them exclusively.

“Subscription video-on-demand has certainly changed the landscape for film and TV viewing, but we think film studios have adapted by focusing on films primarily enjoyed on premium large format screens,” Pachter says.

He continues to have “outperform” ratings on AMC, Regal, and Imax, and “neutral” on Cinemark.