MoffettNathanson is joining in with analysts cutting U.S. box-office projections, pointing to a murky view of when attendance can recover.
As with MKM Partners earlier, it expects 2020 domestic box office will be down 81%.
That brings liquidity concerns back to the forefront for exhibitors.
MoffettNathanson is recommending some “flexibility” when it comes to release window arrangements as an incentive to getting films back into theaters. And it’s urging possible deals with subscription video-on-demand services like Netflix (NFLX +0.8%) and Amazon.com (AMZN +2.9%) as a source of product. (AMC has pointed to the revenue share from its landmark release-window deal with Universal as one of the reasons it can keep theaters open even as more movie releases get delayed.)
MoffettNathanson is maintaining a Neutral on Cinemark (CNK -3.4%), which it says is in the strongest liquidity position among theaters, but it’s cutting its price target to $12 from $16. AMC (AMC -1.8%) and Cineworld (OTC:CNWGY) were “overleveraged” even before the pandemic crisis began, it says.
Other theater stocks: IMAX +0.5%; Marcus (NYSE:MCS) +1%; Reading International (NASDAQ:RDI) -3.8%; National CineMedia (NASDAQ:NCMI) -4.3%; Cineplex (OTCPK:CPXGF) -6.3%.