Movie theater stocks continue to surge after crowds filled theaters to watch the release of The Super Mario Bros. Movie.
- Imax Corp. announced that The Super Mario Bros. Movie was the company’s best-opening weekend for an animated film with $21.6 million.
- Cinemark Holdings Inc. hit the highest stock level since August, saying April 8 marked the strongest day of attendance since Christmas Day 2019 with the openings of Super Mario and Air, a film about Nike Inc.’s courtship of Michael Jordan, according to Bloomberg.
- AMC Entertainment Holdings Inc. stock rose 6.9% following news that the weekend was the company’s third best since December 2019.
- Theater operator Marcus Corp. jumped 7.7% for its biggest gain since September 2021 following the movie’s release.
Why it’s news
Over the last few years, movie theater attendance has dropped significantly, with more consumers waiting for movies to release on streaming services rather than seeing them on the big screen. However, 2023 is stocked with big releases getting more fans to the theater.
Movie theaters are finally seeing some stock increases as theaters recover from years of pushbacks from the pandemic, and more increases are expected throughout the year.
The year started strong with the long-coveted film Avatar: The Way Of Water, which hit the screens sending many fans back into the theaters, and the surge has continued with many significant releases.
Domestic box office revenue for the first quarter of $1.7 billion was about 2% above B. Riley Securities analyst Eric Wold’s projection, he wrote in a research note. While it’s still just about 72% of first-quarter 2019 levels, it ties for the highest quarterly box office recovery level since the pandemic, according to Bloomberg.
The recent release of The Super Mario Bros. Movie helped send movie theater stocks soaring as the movie beat expectations bringing in $204.6 million domestic and $377 million global, according to Variety.
“The box office just kept growing and growing,” says Universal’s president of domestic distribution Jim Orr. “It’s a tremendous worldwide debut, and the movie has a clear runway.”
The movie debuted on Wednesday, April 5, and the surge continued through the Easter weekend and overflowed into Monday, with movie theater stocks still rising. The major movie chains all rose, including Cinemark Holdings Inc, which is currently at $16.21, Imax at $20.58. AMC at $5.38, and Marcus Corp. at $17.71.
Many analysts think the surge in movie theater stocks will continue throughout the year as more movies are released, and consumers become familiar with the theater again.
As theater chains continue to show progress toward returning to pre-pandemic revenue and profitability levels, “investors will feel more comfortable not only assigning pre-pandemic average valuation multiples to the stocks but also looking forward to 2024/2025 estimates as the recovery is anticipated to more fully take hold on results,” says analyst Eric Wold.