Cineplex stock price target lowered at Scotia

Owing to upcoming financial obligations, Scotia analyst Maher Yaghi has lowered his price target on Cineplex (Cineplex Stock Quote, Chart, News, Analysts, Financials TSX:CGX).

As reported by the Globe and Mail, Yaghi February 1 lowered his target on CGX from $11.75 to $11.00 while maintaining his “Sector Perform” rating on the stock.

The analyst explained his reasoning in a note to clients today.

“As a result of a general slowdown in box office attendance due to a pushed out movie release schedule as well as accounting dynamics related to the sale of P1AG, we are updating our estimates for Q4 as well as slightly adjusting some estimates for 2024,” he wrote. “Overall FCF generation in 2024 is still expected to be healthy, but the market remains focused on upcoming debt maturities which, until the company is able to put it behind, the stock will likely remain range bound.”

On February 8, Cineplex will report its Q4 and fiscal 2023 results. On January 11, the company reported that December box office levels were back up to 68 per cent of pre-pandemic levels.

“It’s been a record year for Cineplex’s international programming. As part of our content broadening strategy, international content helped alleviate short-term supply challenges resulting from the now-resolved actors’ and writers’ strikes,” CEO Ellis Jacob said. “The start of 2024 is bringing with it the much-anticipated Dune: Part Two, Ghostbusters: Frozen Empire, Bob Marley: One Love, pop-culture movie favourite turned musical Mean Girls and international film Fighter.”

At press time, shares of CGX were down 1.5 per cent to $8.13.