It would be too simplistic to say that the enthusiastic reviews for Gravity are solely responsible for the 1.4% uptick in IMAX shares this morning — ending this week’s startling 10% drop. But the film was poised to provide a “noticeable jolt” to investor expectations, leading many to “quickly shift their attention” from the disappointing Q3 results to potential strength in Q4 and beyond, B. Riley analyst Eric Wold says this morning. He and other IMAX bulls say that the market overreacted to softer-than-expected box office sales in Q3 where family releases including Universal’s Despicable Me 2 and Disney/Pixar’s Monsters University struggled to keep up with last year’s fanboy hits including Warner Bros’ The Dark Knight Rises and Sony’s The Amazing Spider-Man — especially after Warner Bros delayed 300: Rise Of An Empire to next year. Over the last week analysts’ consensus forecast for IMAX’s Q3 earnings fell to 7 cents a share from a dime. But “trying to judge the IMAX story on a single quarter’s movie slate is short-sighted,” Wold says. He became enthusiastic about the company “based entirely on the improvements we will begin to see next year, and not only any expectations around Q3 trends.” MKM Partners’ Eric Handler also came to the company’s defense. “There’s going to be quarter-to-quarter volatility at the box office,” he says. But as IMAX expands in developing markets including China, Russia and the Middle East “there’s a lot of expansion potential…If you take a long term view, it’s a definite buying opportunity.”
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