Cinemark Holdings (NYSE:CNK) shares dipped Wednesday, currently down around 2.8% at $14.51 per share, after Wells Fargo cut its rating for the stock to Underweight from Equal-Weight, lowering the price target to $13 from $16 per share.
Analysts at Wells Fargo said the bank is downgrading the stock as it is negative on the box office outlook.
"We're downgrading CNK to U/W, as we revised our CY24 DBO lower by -10% and believe Street est. for FY24 remain too high," the analysts mentioned.
"We are lowering our 2024 box office forecast to $8.1bn, or 7-8% below Street's expectations of $8.7-8.8bn, and we think 4-5% below buy side," they added. "While CNK shares have come in 12% since early November (vs S&P 500, +12%), we think there's still incremental risk from estimate revisions + a weak slate through the beginning of '24. Our '24 revs/EBTIDA estimates are -7%/-14% vs. Street."
Wells Fargo expects Cinemark shares to be pressured over the near term by further negative revisions.