UPDATE: Benchmark Downgrades IMAX Corporation (IMAX) to Hold
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(Updated - March 17, 2020 7:48 AM EDT)
(updated to add analyst comments)
Benchmark analyst Mike Hickey downgraded IMAX Corporation (NYSE: IMAX) from Buy to Hold.
The analyst commented, "We have reduced our rating from Buy to Hold, as we suspect on-going material pressure from COVID-19 situation could have a sustained negative impact on financial performance. The market environment remains implausibly challenging near-term, compliments of COVID-19 that has forced the closure of theaters in China, Europe and United States and/or negative influence movie patron frequency behavior within impacted regions. President Trump's updated guidelines call for no groups bigger than 10, which could effectively close all domestic theaters, a guideline that could last until August. In response, Regal announced they would be closing all theaters on Tuesday, a move we anticipate other theater exhibitors will likely follow. Movie theaters in multiple states including Connecticut, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania and Washington have been ordered to close. We are cautious over increased film development/release delays as we have witnessed from both Hollywood studios and OTT providers from the growing necessity for social distancing. NBCUniversal decided to break the theatrical window and will make Trolls World Tour available in-home day and date with theatrical, a potential catastrophic development if other studios also begin to break the window."
Shares of IMAX Corporation closed at $9.15 yesterday.
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