Benchmark Upgrades National CineMedia (NCMI) to Speculative Buy, 'growth trajectory to extend into 2024'

Benchmark analyst Mike Hickey upgraded National CineMedia (NASDAQ: NCMI) from Hold to Speculative Buy with a price target of $4.00.

The analyst comments "NCM has effectively emerged from Chapter 11 bankruptcy. The growth opportunity of NCM had been challenged by a slow-paced recovery in cinema attendance and a downturn in advertising, coupled with uncertainties surrounding Regal's bankruptcy status and the duration of its ongoing exclusive contract with NCM. However, after NCM has navigated the complexities of bankruptcy and secured a renewed long-term agreement with Regal, we believe NCM offers a much-improved investment opportunity. With debt eliminated, it is well-positioned to leverage the revival of domestic box office attendance. Further, we are optimistic over AMC's recent judicial ruling, which permits it to raise needed capital. And the apparent headway in the ongoing Hollywood labor disputes and a resilient economy that has outpaced recession apprehensions further increases our confidence. This incrementally better economic backdrop might also stimulate increased advertising expenditure. The resurgence in the domestic box office is impressive, with the 1Q domestic box office gross witnessing a rise of 28%, and the 2Q marking a 15% increase. This trend strengthens our optimism for sustained growth in attendance as the box office bounces back postpandemic. We anticipate this growth trajectory to extend into 2024, benefiting NCM's on-screen advertising platform. Consequently, we're elevating our rating for NCM to Speculative Buy from Hold and have established a new price target of $4."

For an analyst ratings summary and ratings history on National CineMedia click here. For more ratings news on National CineMedia click here.

Shares of National CineMedia closed at $3.55 yesterday.

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