Weak movie theater attendance has been a drag on Regal Entertainment Group profits in recent months, but that is changing in the opening weeks of 2012.
Two financial firms this week raised their ratings and price targets for the Knoxville-based theater operator’s stock, citing improved theater attendance and advertising.
Piper Jaffray upgraded its rating for both Regal and National CineMedia, an in-theater digital advertising venture co-owned by Regal, to overweight from neutral.
It raised its price target for Regal to $16 from $15 and upped the target for National CineMedia to $18 from $15.
Piper Jaffray said a “massive reversal” in first six weeks of the year “sets the stage for earnings outperformance” for Regal, the largest theater operator in the country.
On National CineMedia, Piper Jaffray said: “We are buyers of NCMI shares as we see scatter-related concerns easing, improving attendance and conservative expectations driving the shares higher.”
Wunderlich Securities also had good things to say about Regal and raised its price target to $22 from $19.
“We are enthused about the quality and spacing of 2012 theatrical product, even if up 19% ytd box office pacing is not sustainable,” Wunderlich said.
Read more at benzinga.com:
Photo: Regal Pinnacle 18 Cinemas (Knoxville News Sentinel archives)