Moviegoers know that the box office has seen better days. But new word out of theatre chain Cineplex (TSE:CGX) reveals that the box office may be making a comeback after those terrible years of shutdown and privation. And Cineplex investors are cheering, sending shares up over 6% in Thursday morning’s trading.
Is there a comeback in the box office? The latest ticket receipts suggest as much; Cineplex noted that revenue for March was up a staggering 46% compared to March 2023, thanks in large part to the releases of “Dune: Part Two” and “Kung Fu Panda 4.” Those two, along with the rest of the slate, led box office revenue to clear $59.2 million that month.
That compares admirably to the March 2023 results, where the take was just $40.6 million. And, in a further sign that at least Canadian theatergoers are making a comeback, March 2024’s figure was equal to 95% of the March 2019 figure of $62.6 million.
Dramatic Developments
Indeed, things are getting downright dramatic at Cineplex theaters. Cineplex recently called a halt to the showing of South Indian cinema at their locations following a shooting. More specifically, the title “Malaikottai Vaaliban” was cited following a series of shootings back in January. The reasons behind the shootings seem to connect to distribution schemes that resemble cartel behavior, and the Movie Theater Association of Canada is working with Public Safety Canada to address the issue.
Further, one analyst suggested that Cineplex stock is currently undervalued. With the CinemaCon event calling attention to the upcoming release slate, which is somewhat backlogged after the writers’ and actors’ strikes of late 2023, that should provide more reason for theatergoers to hit the big screens and drive further profitability.
Should I Buy or Sell Cineplex Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Cineplex stock based on four Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 12.77% loss in its share price over the past year, the average CGX price target of C$12.66 per share implies 61.88% upside potential.
