Wedbush Starts Marcus Corp. (MCS) at Outperform

Wedbush analyst Alicia Reese initiates coverage on Marcus Corp. (NYSE: MCS) with a Outperform rating and a price target of $24.00.

The analyst comments "We initiate coverage of Marcus Corp (MCS) with an OUTPERFORM rating and $24 price target. We have a positive bias, as the company 1) is poised to benefit from a more consistent theatrical release slate over the next several quarters; 2) is likely to raise the dividend back toward pre-pandemic rates, repurchase shares, and/or locate accretive M&A in both theaters and hotels, with no significant debt maturities until 2027; and 3) owns most of its properties with room to monetize surplus real estate. In our view, the current valuation does not fully reflect these factors. MCS shares currently trade at an EV/EBITDA multiple of 6.4x 2025 consensus estimates, below the 2015-2019 average of 8.4x. We believe it is prudent to evaluate Marcus on a longer-term basis, given our view of a stillrecovering environment that does not yet reflect normalized earnings. We view 2027 as the year the North American box office returns to a normalized growth rate of low to mid-single digits annually, after experiencing mid-to-high single-digit growth in 2025 and 2026. With solid box office growth expected for the next several quarters, followed by normalized growth, and a high likelihood of regular dividend increases, debt repayment, and/or M&A to expand the footprint, we see no reason why shares should trade at a trough valuation. We believe the theater segment should trade at a normalized range, similar to its peers, of 7 – 8x 2027 EBITDA. Adding the steady contribution from the hotels segment, which we value at 7x, we arrive at a 7.5x blended multiple on our 2027 consolidated EBITDA to reach our $24 price target."

For an analyst ratings summary and ratings history on Marcus Corp. click here. For more ratings news on Marcus Corp. click here.

Shares of Marcus Corp. closed at $17.24 yesterday.

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