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Can Movie Theaters Gain from Rogue One: A Star Wars Story?
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Movie theater companies are already brimming with positivity regarding the release of Rogue One: A Star Wars Story on Dec 16, the latest ‘Star Wars’ movie from The Walt Disney Co. (DIS - Free Report) . The company has projected an opening week box office sales in the range of $120 - $150 million domestically. However, some industry experts believe that the movie can generate an opening week sales of around $168 million - $180 million in the U.S. alone.
The movie theater operators are currently going through a rough patch. The industry has been bearing the brunt of a Bloomberg report for the last three week. The report stated that the Hollywood studios (film makers) are contemplating the implementation of a new business scheme.
The strategy involves making newly released movies available for home viewing at a premium within as little as two weeks of its screen debut. The news has sent shockwaves across the movie theater (exhibitor) industry straight away for it will destroy their exclusive right of offering any newly released movie in theater alone in the first 90 days.
Several film studios are negotiating about this path-breaking business model in which film makers will be able to offer movies to online video streaming services for a premium of around $25 - $50 extra as rent. Notably, stagnant home video sales have compelled film makers to think about a new strategy to offer more avenues to consumers.
Consequently, the concern over losing exclusive rights offering new movies has taken a toll on stock prices of the major U.S. movie theaters. Share prices of companies, namely, Carmike Cinemas Inc. , AMC Entertainment Holdings Inc. (AMC - Free Report) , IMAX Corp. (IMAX - Free Report) , Regal Entertainment Group and The Marcus Corp. (MCS - Free Report) , have plunged following the report. While Carmike, AMC Entertainment, IMAX and Regal currently carry a Zacks Rank #3 (Hold), The Marcus sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
At this juncture, a box-office success of Rogue One: A Star Wars Story, will be a boon for the struggling movie theater industry. According to industry watchers, a major benefit to opening in December is that holiday hits last longer in theaters. Further, the momentum carries on, rolling through weaker January competition.
Price Performance of Major Movie Theater Stocks
Year-to-date, the Zacks categorised Leisure and Recreation Services Industry (of which movie theater industry is part), has registered a negative growth of 6.11%. In contrast, barring IMAX, all four above mentioned movie exhibitors have posted an impressive growth in the same time period. The Marcus, Carmike, AMC Entertainment and Regal have witnessed 63.94%, 44.29%, 33.33% and 8.80% growth in stock price, respectively. Only, IMAX registered a negative growth of 11.79% year-to-date.
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You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research. See the stocks free >>
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Can Movie Theaters Gain from Rogue One: A Star Wars Story?
Movie theater companies are already brimming with positivity regarding the release of Rogue One: A Star Wars Story on Dec 16, the latest ‘Star Wars’ movie from The Walt Disney Co. (DIS - Free Report) . The company has projected an opening week box office sales in the range of $120 - $150 million domestically. However, some industry experts believe that the movie can generate an opening week sales of around $168 million - $180 million in the U.S. alone.
The movie theater operators are currently going through a rough patch. The industry has been bearing the brunt of a Bloomberg report for the last three week. The report stated that the Hollywood studios (film makers) are contemplating the implementation of a new business scheme.
The strategy involves making newly released movies available for home viewing at a premium within as little as two weeks of its screen debut. The news has sent shockwaves across the movie theater (exhibitor) industry straight away for it will destroy their exclusive right of offering any newly released movie in theater alone in the first 90 days.
Several film studios are negotiating about this path-breaking business model in which film makers will be able to offer movies to online video streaming services for a premium of around $25 - $50 extra as rent. Notably, stagnant home video sales have compelled film makers to think about a new strategy to offer more avenues to consumers.
Consequently, the concern over losing exclusive rights offering new movies has taken a toll on stock prices of the major U.S. movie theaters. Share prices of companies, namely, Carmike Cinemas Inc. , AMC Entertainment Holdings Inc. (AMC - Free Report) , IMAX Corp. (IMAX - Free Report) , Regal Entertainment Group and The Marcus Corp. (MCS - Free Report) , have plunged following the report. While Carmike, AMC Entertainment, IMAX and Regal currently carry a Zacks Rank #3 (Hold), The Marcus sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
At this juncture, a box-office success of Rogue One: A Star Wars Story, will be a boon for the struggling movie theater industry. According to industry watchers, a major benefit to opening in December is that holiday hits last longer in theaters. Further, the momentum carries on, rolling through weaker January competition.
Price Performance of Major Movie Theater Stocks
Year-to-date, the Zacks categorised Leisure and Recreation Services Industry (of which movie theater industry is part), has registered a negative growth of 6.11%. In contrast, barring IMAX, all four above mentioned movie exhibitors have posted an impressive growth in the same time period. The Marcus, Carmike, AMC Entertainment and Regal have witnessed 63.94%, 44.29%, 33.33% and 8.80% growth in stock price, respectively. Only, IMAX registered a negative growth of 11.79% year-to-date.
Where Do Zacks' Investment Ideas Come From?
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research. See the stocks free >>