MW This cinema stock is a 'safe bet in a volatile market' - and it's not AMC or Cinemark

By James Rogers

'During six of the last eight recessions, box office sales experienced growth,' analyst says

High-end movie-theater operator IMAX Corp. is well-positioned to shine in a tough macroeconomic environment, according to analyst firm Benchmark.

"Historical data indicates that during six of the last eight recessions, box office sales experienced growth, suggesting that consumers continue to seek affordable entertainment options even in challenging times," Benchmark analyst Mike Hickey wrote in a note released Tuesday. "This trend underscores the enduring appeal of cinema as a cost-effective leisure activity."

IMAX $(IMAX)$ shares have climbed 44.5% in the last year amid a rebounding box office. Speaking during a conference call to discuss the company's fourth-quarter results last month, IMAX CEO Richard Gelfond said that studio demand for IMAX is at an all-time high. The company expects 2025 to be its best year ever at the global box office, he added, according to a FactSet transcript.

Related: IMAX's stock is up more than 70% this year. Here's why an analyst sees more room to run.

Almost every IMAX release scheduled from May through September is filmed with IMAX cameras, according to Gelfond - a film slate that includes "Mission: Impossible - The Final Reckoning," Marvel's "Thunderbolts," and "The Fantastic Four: First Steps," "F1" and "Superman." The CEO also noted that the year concludes with "Avatar 3," the follow-up to the movie-theater chain's two biggest movies of all time, each of which earned more than $250 million in IMAX.

In his note, Hickey highlighted IMAX's strength at a time when consumers are paying close attention to their spending. "IMAX, with its exceptional upcoming slate of blockbuster releases, is well-positioned to capitalize on this resilience," Hickey wrote. "The company's focus on delivering premium cinematic experiences aligns with consumer preferences for high-quality entertainment, particularly when discretionary spending is under pressure. As such, IMAX presents a compelling investment opportunity, offering both growth potential and defensive qualities in the face of economic uncertainties."

Benchmark has a buy rating and $30 price target for IMAX. Of 10 analysts surveyed by FactSet, eight have a buy rating, one has a hold rating and one has a sell rating for IMAX.

Related: Imax offers buying opportunity as 2025 box office rebounds, says analyst

In November, Wedbush analyst Alicia Reese wrote that "investors are finally beginning to take notice of IMAX as it is on the precipice of at least one strong growth year, if not several."

The movie-theater industry has had a tough few years, marked by the disruption of the COVID-19 pandemic and the fallout from the Hollywood writers and actors strikes. However, recent results from cinema-industry names have pointed to an upturn in the sector's fortunes.

Movie-theater chain and IMAX partner AMC Entertainment Holdings Inc. $(AMC)$ recently reported better-than-expected fourth-quarter revenue, lifted by an improving box office. AMC rival Cinemark Holdings Inc. $(CNK)$ reported record fourth-quarter revenue last month, marking a 27% year-over-year-increase and a 3% increase on the same period in 2019, before the pandemic hit.

Now read: AMC's stock could get a boost from these three factors: analyst

AMC is also in a good position for continued growth, Hickey wrote in a note earlier this month. Benchmark has a hold rating for the movie-theater chain and original meme stock. In a separate note, the analyst firm recently reiterated its buy rating for Cinemark, citing the company as a "top idea."

AMC shares are down 31.2% in the last 12 months, while Cinemark shares are up 33.7%.

-James Rogers

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March 11, 2025 15:35 ET (19:35 GMT)

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