Cineplex: Consensus Price Target Sees Marginal Lift Post Earnings

Cineplex Inc. (TSX: CGX) reported their first-quarter financial results last week, with the company reporting $41 million in revenue, down 85% year over year. Gross margin came in at 69.6%, 390bps higher than it was a year ago, net income meanwhile was $(90) and earnings per share was $(1.42)

A few analysts changed their 12-month price target on Cineplex after the earnings, with the companies 12-month price target slowly inching up to $13.00 from the $12.64 average last month via a total of seven analysts. National Bank has the highest 12-month price target of $17 while the lowest is a $9 price target.

In BMO’s note, their analyst Tim Casey reiterated his market perform rating and $12 price target on the company. Casey refers to this quarter as “not meaningful,” as the business was still locked down and they are looking forward to the second half of 2021 when they are forecasting things to get better.

Casey writes, “We expect marginal improvements in operating results for Q2 and then a step up in H2/21, assuming a relatively stable economic re-opening and consumer recovery,” but remains cautious on the idea that we will get full back to normal as headwinds continue to persist. Casey adds, “We continue to be encouraged by the recovery in the U.S., but we believe the new sustainable level will be at one below pre-COVID levels.”

Below you can see BMO’s updated forecasts for 2021 and 2022.

Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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