Was Wall Street Too Pessimistic About The Summer Box Office?

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Wall Street More Upbeat Amid Promising Summer Box Office Sales

Deadline Financial Editor David Lieberman discusses why investors are more optimistic about the summer movie season.

godzilla-2014-france-wallpaperMany investors appear to think so today after domestic box office sales for X-Men: Days Of Future Past, Captain America: The Winter Soldier, and Godzilla beat some forecastsand B. Riley’s Eric Wold upgraded the industry. AMC Entertainment shares are +3.2% in early trading, and Cinemark is +2.4%, after Wold changed his recommendation for both to “buy” from “neutral.” He also raised price targets for Regal, Carmike, and 3D technology company RealD. Although the summer pop corn movie season has only just begun, Wold says that the early results were good enough for him to change his forecast for Q2 and Q3 to flat box office revenues vs the strong sales from the period last year, as opposed to a low-single digit decline. He’s especially impressed with premium ticket sales for 3D and IMAX venues, which collectively accounted for 51% of the opening weekend sales for Godzilla. Last year’s Gravity “introduced more movie-goers to the benefits of seeing a movie in 3D,” he says. In addition, studios are picking better films to offer in 3D while theaters schedule them to become “more of the default choice as opposed to an upgrade decision.” Once investors move past their concerns about the summer 2014 box office, he says, they’ll focus on 2015 could set a record with sequels for hits including the Avengers, the Hunger GamesMission: Impossible, Fast And Furious, and James Bond.

Still, some other analysts remain skeptical about summer 2014. MKM Partners’ Eric Handler says box office sales so far in Q2 are down 3.1% and he expects them to end up down 4.5%. Although the next two weekends should be strong, “very difficult comparisons loom in the later half of June (when Man Of Steel, Monsters University and World War Z opened to $117M, $82M and $66M, respectively)” last year, he says.

This article was printed from https://deadline.com/2014/05/was-wall-street-too-pessimistic-about-the-summer-box-office-736077/