B. Riley Upgrades Cinemark Holdings (CNK) to Buy

B. Riley upgraded Cinemark Holdings (NYSE: CNK) from Neutral to Buy with a price target of $47.00 (from $41.75).

Analyst Eric Wold commented, "Cinemark Holdings (CNK) is scheduled to report Q2 results on Tuesday, 8/9, before the open. As has been the case with most of our exhibitor coverage, we are lowering our Q2 estimates into the print to account for increased margin pressures on the weaker box office results. However, as we foresaw this estimate risk and downgraded CNK to Neutral on 3/30 given, what seemed to be, overly optimistic consensus expectations, we believe investors can begin focusing on the stronger box office trends expected to begin 2017. After declining by as much as 10% post-downgrade, CNK shares are now virtually unchanged over that four-month period and, we believe, poised to experience valuation multiple expansion heading into our projection for a multi-year box office up-cycle. With an increase in the valuation multiple assigned to our domestic EBITDA estimate from 7.5x to 8.5x and our LatAm valuation multiple remaining unchanged at 7.5x, this drives a new price target of $47.00 (up from $41.75). And with the Q2 box office/estimate risks now in the rearview mirror and 28.0% upside to our new price target along with a dividend yield of 2.9%, we are upgrading CNK from Neutral to Buy. In addition, note that our new price target equates to a blended EBITDA multiple of 8.2x on our 2017 EBITDA estimate, which is still 100 bps below the previous peak multiple achieved in early 2015 – indicating the potential for further upside, we believe, as the box office cycle plays out."

For an analyst ratings summary and ratings history on Cinemark Holdings click here. For more ratings news on Cinemark Holdings click here.

Shares of Cinemark Holdings closed at $36.72 yesterday.

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