MKM Partners Downgrades Cinemark Holdings (CNK) to Neutral with Potential For Upside in '22

February 1, 2021 5:39 AM EST
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Price: $20.52 -6.98%

Rating Summary:
    13 Buy, 10 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 7 | Down: 16 | New: 68
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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".

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 $20.24 yesterday.

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