Credit Suisse Doubtful About Cinemark's Box Office Recovery in 2023

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By Sam Boughedda

Cinemark Holdings (NYSE:CNK) was double-downgraded to Underperform from Outperform, with the price target cut to $9 from $25 by Credit Suisse on Wednesday.

Analysts there said while many industry participants have expressed optimism that the 2023 U.S. box office will continue its post-pandemic recovery, they are doubtful.

"We built a bottom-up film forecast and see industrywide domestic box office revenue up about 4% in 2023. This is in part due to Paramount's next Star Trek release having been pushed to 2024 and our presumption Disney's Blade will be similarly delayed, but also due tough comps with the top titles of 2022," wrote the analysts.

In addition, Credit Suisse sees "softness in 1Q23 and 4Q23" while believing summer 2023 should see offsetting gains. In addition, it is forecasting 4Q22 domestic box flat, below consensus.

"Following a comprehensive update of our Cinemark forecast, we shift to well-below-consensus estimates, including EBITDA of $113M for 4Q22 (vs. Street $128M) and $417M for 2023 (vs. Street $569M), while we lower ‘22/’23 EPS about $1 to - $0.41/$0.11. Our 3Q22 EBITDA of $92M is similar to the Street’s $93M. We do not forecast a material further recovery towards pre-pandemic levels in 2024 and beyond; rather, we trendline long-term historically secular dynamics off our 2023 base," the analysts added.