Marcus Corporation (MCS): Raising PT On Significant Acquisition - B.Riley
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B. Riley analyst, Eric Wold, reiterated his Buy rating on shares of Marcus Corp. (NYSE: MCS) and raised the price target to $33.50 from $31 after the company announced the acquisition of Wehrenberg Theatres.
The analyst believes this acquisition will accomplish 4 things:
1) boost the company's theater penetration in the key Midwest region
2) increase the circuit’s screen base by 29%
3) provide numerous paths to improve revenues/margins through MCS’ theater-enhancement strategy
4) provide an opportunity to implement a reverse-1031 tax strategy to monetize hotel assets
The analyst stated "we have been anticipating a major acquisition for the past year, we would argue the 50% gain in MCS shares over that period has been a function of the outperformance of the MCS circuit vs. any increased optimism around hotel monetization efforts – and this remains incremental to both estimates and valuation".
The price target increases from $31.00 to $33.50 on an increasing multiple on the Theater division EBITDA estimate before any contribution from the Wehrenberg acquisition.
Shares of Marcus Corp. closed at $29.50 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change, Mergers and Acquisitions
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