Cinemark Holdings (CNK) PT Raised to $19 at Roth/MKM

Roth/MKM analyst Eric Handler raised the price target on Cinemark Holdings (NYSE: CNK) to $19.00 (from $17.00) while maintaining a Neutral rating.

The analyst comments "The 1Q box office outperformed, but we still see another two quarters before the industry begins to strengthen. The outlook for 2025 and 2026 appears considerably stronger and should serve as a catalyst for Cinemark to resume its recovery story. However, we believe it's a bit too early to take a more constructive view, especially with so few near-term catalysts. Raising PT from $17 to $19 (7x our 2-year average adjusted EBITDA) as a result of our 1Q upward revision. 1Q finishes ahead of projections. We are raising our revenue and adjusted EBITDA estimates to $563mn (-8% y/y, -21% versus 1Q19) and $55mn (-37% y/y, -64% versus 1Q19), respectively, from $540mn and $37mn — ahead of consensus at $545mn and $50mn, respectively. Our revisions predominantly reflect a smaller than projected domestic box office decline of 6.5% versus our prior -9% outlook. Operating leverage from the higher revenue should produce an adjusted EBITDA margin of 9.7%, up from our prior 6.8% view, but still down 440bps from last year's 14.1% result."

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