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IMAX Focused on Chinese Movie Market, Headwinds Persist
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We issued an updated research report on IMAX Corporation (IMAX - Free Report) on Aug 25.
We are impressed by the company’s focus on cashing in on the lucrative Chinese movie market. In a bid to expand its presence in China, IMAX inked a deal with Wanda Cinema Line earlier in the month to open 150 theaters in the country over the next six years. This is IMAX's biggest deal so far and is projected to generate $1.8 billion in box office revenues over a 12-year period. Out of this figure, 110 theatres are anticipated to be installed by 2020. The current deal is in addition to a 2013 agreement under which Wanda committed to build 120 new theatres by 2020.
Apart from China, IMAX has inked many other deals aimed at global expansion. A few notable ones include the three-theater deal with Ster-Kinekor Theatre of South Africa, a multi-picture deal with Viacom, Inc.’s Paramount Pictures, a five-theatre agreement with Cineworld Group in Europe and a 25-theatre contract with AMC Theatres in the U.S. Overall, we are positive on the company's aggressive expansion strategy.
Apart from foreign exchange risks, the company may also suffer due to stiff competition. Moreover, IMAX's second-quarter of 2016 earnings miss is concerning.
The impressive start made by the movie Suicide Squad is a huge positive for IMAX as its results in the second quarter were hurt by low box office collections. The disappointing box-office performance of movies like Alice Through the Looking Glass and Teenage Mutant Ninja Turtles: Out of the Shadows were largely responsible for the year-over-year underperformance in the second quarter.
Zacks Rank and Stocks to Consider
IMAX Corporation currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the broader Consumer Discretionary sector include Guess’, Inc. (GES - Free Report) and Town Sports International Holdings Inc. . Both stocks carry a Zacks Rank #2 (Buy).
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IMAX Focused on Chinese Movie Market, Headwinds Persist
We issued an updated research report on IMAX Corporation (IMAX - Free Report) on Aug 25.
We are impressed by the company’s focus on cashing in on the lucrative Chinese movie market. In a bid to expand its presence in China, IMAX inked a deal with Wanda Cinema Line earlier in the month to open 150 theaters in the country over the next six years. This is IMAX's biggest deal so far and is projected to generate $1.8 billion in box office revenues over a 12-year period. Out of this figure, 110 theatres are anticipated to be installed by 2020. The current deal is in addition to a 2013 agreement under which Wanda committed to build 120 new theatres by 2020.
Apart from China, IMAX has inked many other deals aimed at global expansion. A few notable ones include the three-theater deal with Ster-Kinekor Theatre of South Africa, a multi-picture deal with Viacom, Inc.’s Paramount Pictures, a five-theatre agreement with Cineworld Group in Europe and a 25-theatre contract with AMC Theatres in the U.S. Overall, we are positive on the company's aggressive expansion strategy.
Apart from foreign exchange risks, the company may also suffer due to stiff competition. Moreover, IMAX's second-quarter of 2016 earnings miss is concerning.
The impressive start made by the movie Suicide Squad is a huge positive for IMAX as its results in the second quarter were hurt by low box office collections. The disappointing box-office performance of movies like Alice Through the Looking Glass and Teenage Mutant Ninja Turtles: Out of the Shadows were largely responsible for the year-over-year underperformance in the second quarter.
Zacks Rank and Stocks to Consider
IMAX Corporation currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the broader Consumer Discretionary sector include Guess’, Inc. (GES - Free Report) and Town Sports International Holdings Inc. . Both stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>