On Wednesday, B.Riley maintained its Buy rating and $30.00 price target on shares of IMAX Corporation (NYSE:IMAX). Following a series of meetings with IMAX executives, the firm expressed increased confidence in the company's potential for stronger growth and expanding margins by 2025. The meetings, which took place on Monday and included IMAX's CFO Natasha Fernandes and SVP of Investor Relations Jennifer Horsley, left analysts optimistic about the company's future.
The analyst from B.Riley highlighted the shift to premium moviegoing experiences and a strengthening demand for the global IMAX system as key factors that will contribute to IMAX's growth. They noted an attractive film slate, which is well-suited to the IMAX format, as a significant driver of potential box office share gains. This, in turn, is expected to result in high incremental contribution margins.
B.Riley's projections for IMAX in 2025 already surpass consensus levels, but the firm sees further potential for upside. The analyst believes that these factors will contribute to a more appropriate valuation multiple for IMAX shares over the next 12 months.
The endorsement of IMAX's strategy and outlook by B.Riley underscores the company's focus on delivering premium experiences to moviegoers. IMAX's management team, through their discussions with analysts, has conveyed a business trajectory that aligns with B.Riley's positive outlook on the stock. The maintained price target of $30 reflects this sentiment and anticipates a positive performance for IMAX in the coming year.
In other recent news, IMAX Corporation has disclosed significant developments. The firm's Senior Vice President, Finance & Controller, Elizabeth Gitajn, is set to resign effective October 31, 2024, with the interim responsibilities to be assumed by Natasha Fernandes, the current Chief Financial Officer.
The company recorded robust second quarter revenues of $89 million, surpassing expectations, largely driven by increased system sales and installations. A significant deal was struck with Wanda Film in China, marking a strategic advancement in content collaboration. The release of "Deadpool & Wolverine" set new records, indicating a positive tone for IMAX's third-quarter earnings.
Analysts from Roth/MKM and Macquarie maintained a positive outlook on IMAX, emphasizing its potential for growth. On the expansion front, IMAX has been enhancing its global footprint, partnering with Saudi Arabia's leading cinema operator, muvi Cinemas, and broadening its longstanding partnership with SM Cinema in the Philippines. These are recent developments in IMAX's strategic growth plan.
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