UPDATE: Benchmark Downgrades National CineMedia (NCMI) to Hold
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(Updated - October 3, 2022 6:49 AM EDT)
Benchmark analyst Mike Hickey downgraded National CineMedia (NASDAQ: NCMI) from Buy to Hold.
The analyst commented, "We are downgraded NCM to Hold from Buy, based on a challenging cinema attendance and advertising recovery, a heavy debt burden with near-term maturities and tightening debt covenants, and uncertainty as it relates to Regal’s bankruptcy process and longevity of their existing exclusive agreement. We are confident NCM will be able to amend and extend its existing near-term debt and leverage covenants, but market conditions are challenging and could influence fewer desirable outcomes. We think the RGC contract stays at NCM, but the Cineworld bankruptcy process has created uncertainty that the existing agreement will sustain, which would be a devastating blow to NCM if the contract is cancelled. The box office continues to recover, but product shortages have created headwinds, which could intensify as the recession scenario builds. We have taken a more conservative on view on NCM’s FY22 and FY23 growth opportunity."
Shares of National CineMedia closed at $0.65 yesterday.
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