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Shares of major movie theater companies, including AMC (AMC - Free Report) and Regal Entertainment Group (RGC - Free Report) , sunk on Monday after yet another big-budget movie fizzled at the box office during its opening weekend.
The much-anticipated sequel to the 1980s dystopian science fiction thriller Blade Runner, starring Harrison Ford, flopped on its opening weekend. The second in installment, Blade Runner 2049, starring Ryan Gosling alongside Ford, Jared Leto, and Robin Wright, made roughly $30 million in its first weekend.
On its face, this number is not bad, and it fared well compared to its current competition. But with a $150 million budget, Blade Runner 2049 was supposed to make at least $45 million to $50 million this past weekend, based on projections. The big miss from the blockbuster movie starring one of Hollywood’s biggest actors—and one of its most iconic—helped send shares of movie theater companies tumbling.
AMC saw its stock tank by almost 8% to $14 per share. Shares of IMAX (IMAX - Free Report) sunk 3.56%, while Cinemark Holdings (CNK - Free Report) dipped by 3.77%. Regal Entertainment also experienced a decline, as its shares dipped by more than 4.59% from Friday’s closing price.
The Blade Runner 2049 miss is part of an overall decline in ticket sales that has caused many investors to leave movie theater stocks.
What might be worse for movie theater companies and investors is not that the movie flopped a bit in its opening weekend, but that based on a few key metrics, it shouldn’t have.
The film has been well reviewed, has been teased for almost a year, and features star power. Yet despite scores of 88% and 83% on Rotten Tomatoes, Gosling and Ford, and a real marketing budget, the movie missed box office expectations by 40%.
On top of Blade Runner 2049’s embodiment of the alarming movie industry trend, Wedbush Securities analyst Michael Pachter lowered his price targets for a few movie theater giants.
Pachter cut his Regal price target from $23 per share to $19. He also lowered his AMC target to $20.50 per share from $22.7 and dropped Cinemark to $42 a share from $44.
Bottom Line
All four companies, AMC, IMAX, Cinemark, and Regal, are currently Zacks Rank #3 (Hold) stocks. But if big-budget, star-filled movies continue their current dismal box office run, investors might want to consider looking to an entertainment industry better positioned for the future.
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Why Did Movie Theater Stocks Sink Today?
Shares of major movie theater companies, including AMC (AMC - Free Report) and Regal Entertainment Group (RGC - Free Report) , sunk on Monday after yet another big-budget movie fizzled at the box office during its opening weekend.
The much-anticipated sequel to the 1980s dystopian science fiction thriller Blade Runner, starring Harrison Ford, flopped on its opening weekend. The second in installment, Blade Runner 2049, starring Ryan Gosling alongside Ford, Jared Leto, and Robin Wright, made roughly $30 million in its first weekend.
On its face, this number is not bad, and it fared well compared to its current competition. But with a $150 million budget, Blade Runner 2049 was supposed to make at least $45 million to $50 million this past weekend, based on projections. The big miss from the blockbuster movie starring one of Hollywood’s biggest actors—and one of its most iconic—helped send shares of movie theater companies tumbling.
AMC saw its stock tank by almost 8% to $14 per share. Shares of IMAX (IMAX - Free Report) sunk 3.56%, while Cinemark Holdings (CNK - Free Report) dipped by 3.77%. Regal Entertainment also experienced a decline, as its shares dipped by more than 4.59% from Friday’s closing price.
The Blade Runner 2049 miss is part of an overall decline in ticket sales that has caused many investors to leave movie theater stocks.
What might be worse for movie theater companies and investors is not that the movie flopped a bit in its opening weekend, but that based on a few key metrics, it shouldn’t have.
The film has been well reviewed, has been teased for almost a year, and features star power. Yet despite scores of 88% and 83% on Rotten Tomatoes, Gosling and Ford, and a real marketing budget, the movie missed box office expectations by 40%.
On top of Blade Runner 2049’s embodiment of the alarming movie industry trend, Wedbush Securities analyst Michael Pachter lowered his price targets for a few movie theater giants.
Pachter cut his Regal price target from $23 per share to $19. He also lowered his AMC target to $20.50 per share from $22.7 and dropped Cinemark to $42 a share from $44.
Bottom Line
All four companies, AMC, IMAX, Cinemark, and Regal, are currently Zacks Rank #3 (Hold) stocks. But if big-budget, star-filled movies continue their current dismal box office run, investors might want to consider looking to an entertainment industry better positioned for the future.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>