Cinemark Holdings is poised for growth, says Wedbush analyst

Cinemark Holdings, (NYSE:CNK) the international movie theater chain, is poised for growth around the world and there is still upside in its share price despite volatile trading since the close of last year.

Or at least that is the view of Michael Pachter, a widely-followed analyst with Wedbush, who is keeping an Outperform rating and a US$43 price target on the stock.

A number of drivers are fueling Cinemark’s prospects for expansion, according to Pachter.

These include the widening of Cinemark’s presence across the US as well as its reach in Latin America, where in a best-case scenario, it will add at least 100 screens per year by next year. Upgrades made to its theatres are also showing signs of bolstering its profitability and it is making money by expanding its on-screen advertising across Latin America.

A varied line-up of movies at the box office should also boost its profits through the end of next year as will the expansion of its Movie Club subscription offering.

Bullish on the company’s outlook, Wedbush is adjusting its estimate for Cinemark’s revenue for this year to US$3.2bln from US$3.145bn and its earnings per share estimate to US$1.94 from US$1.85.

Next year, Wedbush’s expectation is that Cinemark’s revenue will jump to US$3.315bn from the previous estimate of US$3.25bn. Its earnings per share, meanwhile, will rise to US$2.09 from the projection of US$2.07.

Based in Plano, Texas, Cinemark Holdings is the third-largest movie theater chain in the United States and it also has an entrenched presence in Latin America. It operates theaters mainly in smaller cities and suburban areas of bigger cities.

Cinemark shares jumped 1.69% to US$36.19 in late morning trade.

Story by ProactiveInvestors