For the first time in over 75 years, a major Hollywood studio, Sony Pictures (NYSE:SONY), has acquired a movie theater chain, Alamo Drafthouse. The theater was bought from Altamont Capital Partners, Fortress Investment Group, and founder Tim League. Previously, the Paramount Consent Decrees didn’t allow film distributors to own theater chains. However, this rule was abandoned in 2020. However, investors weren’t enthused about the deal, as shares slipped in today’s trading.
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Alamo Drafthouse CEO Michael Kustermann will stay on and report to Ravi Ahuja, the president and CEO of the new Sony Pictures Experiences division. The chain’s 35 cinemas will continue to operate under Alamo Drafthouse.
Kustermann said he’s excited about partnering with Sony in order to innovate and improve the movie-going experience. In fact, a lot of innovation will likely be required, as Alamo Drafthouse declared Chapter 11 bankruptcy in 2021 and recently closed theaters in North Texas.
Is SONY Stock a Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on SONY stock based on three Buys assigned in the past three months, as indicated by the graphic below. After a 16% decline in its share price over the past year, the average SONY price target of $112.93 per share implies 34.18% upside potential.
