MKM Partners Downgrades Cinemark Holdings (CNK) to Neutral with Potential For Upside in '22
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MKM Partners analyst Eric Handler downgraded Cinemark Holdings (NYSE: CNK) from Buy to Neutral while raising the Fair Value estimate to $22.00 (from ($15.00) with shares back to pre-pandemic levels and visibility into the slope and pace of the expected cinema recovery challenging to assess. The company has done very well in managing its liquidity and still has a financial flexibility with its balance sheet but the risk/reward appears balanced.
The analyst stated "In our view, an attractive deleveraging story should begin playing out in 2022, and we think a dividend could come back into play at some point in 2023. However, we would prefer to be patient and see how business ramps up in 2H21 while awaiting a more attractive entry point for the shares. Our fair value estimate is now $22 (7x our adjusted EBITDA for 2022E), up from our prior $15 price target, which leaves less than 9% upside from the current share price".
Shares of Cinemark Holdings closed at $20.24 yesterday.
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