RE: Intrerting read7 Mar 2022 19:16
Part 2
In 2021, the US box office pulled in $4.5bn in sales, up 101% year-on-year, according to Comscore. Helping bring moviegoers back has been a stronger content line-up towards the end of last year, which translated into improved ticket sales. Daniel Craig’s James Bond swan song No Time To Die blasted past $730m at the global box office, while Spiderman: No Way Home has become the third-biggest movie ever in the US.
$4.5BN
US BOX OFFICE SALES IN 2021, UP 101% FROM 2020
Last year Warner Bros released its entire content slate on demand through HBO Max. Dune was its biggest success with a $40m opening weekend, going on to earn over $108m at the box office. However, Matrix Resurrections scored a disappointing $10m opening before going on to earn just over $38m at the US box office. This year the company has switched to a theatrical-first model, starting with the March release of The Batman, which is tracking for a $120–130m opening weekend in the US.
Stronger roster of films could help Cineworld shares
The PR around Cineworld Day focused on 2022’s line up of must-see blockbusters. Yet, March’s sparse line-up shows that major studios remain wary of releasing big-budget productions against each other.
The Batman won’t face a serious challenge at the box office until Sandra Bullock and Channing Tatum’s romcom The Lost City comes out on 25 March. The superhero film will be available on demand 45-days after its theatrical release, in a sign that Warner Bros is hedging its bets with a shortened cinema-only window.
April sees the release of the Harry Potter spin-off Fantastic Beasts: The Secrets of Dumbledore, while Doctor Strange in the Multiverse of Madness and Top Gun: Maverick are set to come out in May. If these can deliver strong opening weekends, then Cineworld shares could see some uplift, but it’s clear studios are still testing the waters when it comes to their release strategy.
Analysts on the fence
Berenberg reiterated its ‘hold’ rating on Cineworld stock in January along with a 85p price target, according to data from MarketWatch. In June last year, Berenberg analysts said there were “too many unknowns” regarding Cineworld’s future, adding the pandemic was a “black swan” event that had fundamentally changed the way movies will be distributed — notably shorter exclusivity windows for cinemas will become the norm. Barclays is also sitting on the fence, having reiterated its ‘equal weight’ rating on Cineworld shares in November.
Given the falls in Cineworld’s share price, the stock could be cheap. Promotions like Cineworld Day will raise the company’s profile, however investors should pay close attention to the fundamentals and any strategic outlook offered when the cinema chain releases full-year 2021 results on 17 March.