(THR) Shares in Imax surged after China’s Lunar New Year holiday propelled tentpoles like Detective Chinatown 3 and Hi, Mom to blowout box office performances.
Market analysts and beleaguered North American exhibitors are watching China’s holiday opening weekend this year for signs of an eventual full recovery globally from the COVID-19 pandemic. On Tuesday, Imax stock rose 8 percent to $20.05 in mid-morning trading on the New York Stock Exchange, after hitting a new 52-week high of $20.47 following the market open.
Analysts cited the strong Chinese Lunar New Year opening weekend as boding well for Imax as it looks to a box office rebound in its global circuit from the COVID-19 crisis later this year and next.
“We anticipate the vast majority of global Imax premium large format screens will re-open in full year 2021, blockbuster films will release, and movie goers will return to theaters as we have witnessed in other key cinema markets including China and Japan,” Benchmark analyst Mike Hickey wrote in a Feb. 14 investment note, while raising his price target on Imax shares to $22.00 on a “2022 global box office growth reset.”
In China, where Imax has an expanding footprint, the giant screen exhibitor has touted the box office performance of local language films, despite capacity limits in theaters, as proof the major studios risk pivoting too quickly to an evolving premium video-on-demand distribution model for tentpole releases delayed into 2021 or sent directly to streaming platforms.
“This result showed ‘when open and safe,’ Imax continues to be the preferable way to view movies,” Macquarie Capital analyst Chad Benyon argued in a Feb. 15 investors note.
Source: The Hollywood Reporter by Etan Vlessing