Snow Wars: Cineplex Q4 results could be hit by bad weather, says Canaccord Genuity

Jan 13 04:01 2018 Print This Article

With a new Star Wars movie on the way, the fourth quarter was looking like it could be a boon for Cineplex (TSX:CGX).

Not so fast, says Canaccord Genuity analyst Aravinda Galappatthige.

In a research update to clients Friday, Galappatthige, maintained his “Buy” rating on Cineplex, but lowered his one-year price target on the stock from $47.00 to $43.00, implying a return of 28 per cent over the Thursday’s closing price of $33.61.

The analyst says this quarter was shaping up to fall below expectations to begin with. Throw in frigid weather across much of Canada and the quarter looks to be even worse.

“Using data from the Motion Picture Theatre Association of Canada (MPTAC), we estimate a 3.9% y/y increase in overall Q4/17 Canadian box office sales,” the analyst explains. “This compares with our original expectation of 8% growth. The variance vs. expectations is due to the last couple of weeks of December coming in below assumptions despite the strength of the new Star Wars title, we suspect partly due to worse than usual weather conditions. Star Wars: The Last Jedi, Thor:Ragnarok and Justice League led the quarter in terms of titles.”

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Cantech Letter

Founded in 2008 by Nick Waddell, Cantech Letter is an online magazine focusing on Canadian technology. The site has grown into one of the most popular and respected financial sites in Canada, and was described by Canadian Business Magazine as “one of Canada’s premier technology newsletters”. Waddell, who is Senior Editor, is routinely called on by the mainstream media for perspective on Canadian technology, and has been featured on BNN, CTV News Channel, and the CBC program “The Lang and O’Leary Exchange” in addition to mainstream print media such as The Guardian, The International Business Times, The Globe and Mail, Macleans, The Waterloo Record , Canadian Business, Slate, and Business Insider. You can email Nick at nick@cantechletter.com Cantech Letter is focused on those companies listed on the TSX and TSXV Technology, Cleantech and Life Sciences Sectors. Each year we present the Cantech Letter Awards, which honor Canada’s Top Technology Stock and Top Technology Stock Executive.

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