Barclays on U.S. Entertainment: Monthly Movie Mail: 2Q Box Office on Track; Sell-off May be Overdone
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Price: $5.44 -6.37%
Rating Summary:
5 Buy, 15 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 5 | Down: 4 | New: 11
Rating Summary:
5 Buy, 15 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 5 | Down: 4 | New: 11
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Barclays on U.S. Entertainment: Monthly Movie Mail: 2Q Box Office on Track; Sell-off May be Overdone
Barclays analyst says, "With one month left in the second quarter, we believe 2Q11 consensus estimates of 8-9% Y/Y growth in admissions revenue per screen are achievable for Regal (NYSE: RGC) and Cinemark (NYSE: CNK). Quarter-to-date, the domestic box office (including this past weekend) is up 12.8% Y/Y. Thus far in the summer box office season, domestic results have been roughly in-line with our expectations, all in all. While Kung Fu Panda 2 disappointed and Pirates of the Caribbean 4, Thor and X-Men: First Class underwhelmed, The Hangover Part II and Bridesmaids have outperformed expectations. With one month left in the quarter, we believe the box office will be able to sustain its recent positive momentum in June driven by the upcoming releases of Super 8, Green Lantern, and Cars 2, as well as a relatively easy Y/Y comparison (June 2010 was down 3.0% Y/Y)."
"Sell-off in exhibitor stocks has been an overreaction, in our view. Since May 20, 2011, RGC is down 13.9% and CNK is down 7.7%, compared to a 2.5% decline for the S&P 500. We believe this sell-off has been largely driven by concerns about declining "3D splits...Reiterate Overweight on Regal; current dividend yield of 6.7% provides downside support. RGC shares have typically found downside support as its dividend yield approaches 7.0%. Over the last five years (excluding the financial crisis), RGC's dividend yield has traded above 6.7% only 9% of the time and above 7.0% only 2% of the time."
Barclays analyst says, "With one month left in the second quarter, we believe 2Q11 consensus estimates of 8-9% Y/Y growth in admissions revenue per screen are achievable for Regal (NYSE: RGC) and Cinemark (NYSE: CNK). Quarter-to-date, the domestic box office (including this past weekend) is up 12.8% Y/Y. Thus far in the summer box office season, domestic results have been roughly in-line with our expectations, all in all. While Kung Fu Panda 2 disappointed and Pirates of the Caribbean 4, Thor and X-Men: First Class underwhelmed, The Hangover Part II and Bridesmaids have outperformed expectations. With one month left in the quarter, we believe the box office will be able to sustain its recent positive momentum in June driven by the upcoming releases of Super 8, Green Lantern, and Cars 2, as well as a relatively easy Y/Y comparison (June 2010 was down 3.0% Y/Y)."
"Sell-off in exhibitor stocks has been an overreaction, in our view. Since May 20, 2011, RGC is down 13.9% and CNK is down 7.7%, compared to a 2.5% decline for the S&P 500. We believe this sell-off has been largely driven by concerns about declining "3D splits...Reiterate Overweight on Regal; current dividend yield of 6.7% provides downside support. RGC shares have typically found downside support as its dividend yield approaches 7.0%. Over the last five years (excluding the financial crisis), RGC's dividend yield has traded above 6.7% only 9% of the time and above 7.0% only 2% of the time."
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