IMAX stock isn’t getting enough love, Roth says

Investors are looking at headwinds for IMAX (IMAX Stock Quote, Chart, News, Analysts, Financials NYSE:IMAX) that are simply yesterday’s news.

That’s the opinion of Roth MKM analyst Eric Handler, who in an update to clients December 5, reiterated his “Buy” rating while lowering his price target from $26.00 $22.00 on IMAX.

The analyst says IMAX has emerged stronger from the various externalities that it has faced of late.

“In our view, investors are not giving IMAX enough credit for its increasing local language contributions, its expanding global footprint and accelerating installation pace, and the potential from its relaunched Stream Smart service,” Handler argued. “We recognize Hollywood’s 2024 release slate has been negatively impacted by multiple high profile delays as a result of the now settled strikes, but this issue is temporary. The 2025-2027 lineup is very encouraging, especially with the return of key mega-franchise releases (Avatar, Avengers, Star Wars).”

The analyst thinks IMAX will post EBITDA of $130.2-million on revenue of $382.7-million in fiscal 2023. He expects those numbers will improve to EBITDA of $123.2-million on a topline of $386.5-million in fiscal 2024.

Handler explained the reasoning behind his target lowering.

“As a result of our reduced 2024 estimates, we are lowering our price target for IMAX shares from $26 to $22. This target is based on EV/EBITDA multiples of 12x/10x for 2024E/2025E,” he concluded