On Wednesday, Canaccord Genuity revised its price target for Cineplex (CGX:CN) (OTC: CPXGF), dropping it to Cdn$12.00 from the previous Cdn$12.50. Despite this adjustment, the firm has maintained its Buy rating on the stock. This decision comes after Cineplex reported box office results for the second quarter of 2024, which did not meet the initial expectations set by analysts, achieving only 60% of the pre-pandemic levels seen in 2019.
Cineplex, however, showed signs of recovery in June, with box office results climbing to 90% of the figures from the same period before the pandemic. This improvement is a positive indicator for the company, which has been working to rebound from the impacts of the COVID-19 pandemic on the film exhibition industry.
Looking forward, Canaccord Genuity is optimistic about Cineplex's potential for a stronger second half of the year. The anticipation of a box office revival is based on a slate of blockbuster films scheduled for release, including titles such as "Despicable 4," "Deadpool vs Wolverine," "Joker: Folie à Deux," "Venom: The Last Dance," "Gladiator II," "The Lord of the Rings: The War of the Rohirrim," and "Mufasa: The Lion King." These high-profile releases are expected to attract significant audiences and drive up box office numbers.
In light of the Q2 results, Canaccord Genuity has made moderate adjustments to its estimates for Cineplex. While the price target has been slightly lowered, the firm's outlook remains positive, as reflected in the maintained Buy rating. The analyst from Canaccord Genuity believes that the upcoming film lineup will be a key factor in the recovery of Cineplex's box office performance.
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