Is IMAX stock a buy? (July, 2024)

With an improving international footprint, Roth MKM analyst Eric Handler thinks there is money to be made on IMAX (IMAX Stock Quote, Chart, News, Analysts, Financials NYSE:IMAX)

In a research update to clients July 18, Handler maintained his “Buy” rating on IMAX while raising his price target from $22.00 to $23.00.

“We continue to like IMAX for its blockbuster focus, global footprint, and asset light business model. We are raising our 2Q estimates due to the outperformance of Inside Out 2 and believe the company remains on track to achieve $1bn+ of global box office (GBO) in 2024,” he wrote. “Additionally, we are please with renewed contract signing momentum. Raising PT from $22 to $23 (10.5x/9x our 2024E/2025E adjusted EBITDA)”

The analyst thinks IMAX will post EBITDA of $145.1-million on revenue of $375.5-million in fiscal 2024. He expects those numbers to improve to EBITDA of $173.3-million on revenue of $420.6-million in fiscal 2025.

Handler cautions that the third quarter box office could be challenging.

“We forecast an improved q/q GBO performance in 3Q to $273mn (-21% y.y), but the period is facing extremely challenging comparisons against last year’s success with Oppenheimer (taking in over $180mn on its own in 3Q23). This year’s 3Q has a deep lineup of titles highlighted by the upcoming Deadpool & Wolverine. The quarter started with Despicable Me 4 which has taken in $18mn QTD and will lose most of its screens this weekend to Twisters. Other likely titles include Borderlands, Alien: Romulus, Beetlejuice, Beetlejuice, Transformers One, and Megalopolis, We anticipate a resurgence from China’s local language line-up, including filmed for IMAX title, The Traveler.”