IMAX (IMAX) Needs StarWars To Deliver - B Riley

B.Riley analyst, Eric Wold, thinks the pressure is on for Star Wars: The Force Awakens to deliver the necessary box office receipts in the remaining weeks. This speaks to the poor performance and reception of those films in general as opposed to any change in demand trends for the IMAX Corporation (NYSE: IMAX) format. There is now more of a downward than upward bias to Q4 estimates heading into the final weeks of the quarter.

It could happen. The wide-reaching, multi-generational demand for Star Wars coupled with expected strong legs on 17% more screens globally throughout its run than the current record holder Jurassic World from this summer, we remain optimistic that the film could not only make up the QTD shortfall, but also start 2016 on a path towards outperformance.

IMAX box office projection of $299.7MM for the quarter will be dependent on the success of the opening weekend. The prior opening period record on IMAX screens (ex-China as Star Wars opens there on 1/9) is held by Jurassic World this past summer at $21.0MM domestic and $32.6MM global. Although Jurassic World opened in the stronger summer period, Star Wars is opening on 8% more domestic IMAX screens (392 vs. 363) and 18% more international screens (276 vs. 234) – even before the addition of 272 China screens in January.

If they boost our domestic projection to $600MM (or #5 all time) with a similar overseas multiplier and 55% in Q4, this would increase the Q4 IMAX contribution by ~$45MM (which matches the projected QTD shortfall).

The firm maintained a Buy rating and $52 price target on IMAX.

For an analyst ratings summary and ratings history on IMAX Corporation click here. For more ratings news on IMAX Corporation click here.

Shares of IMAX Corporation closed at $39.02 yesterday.

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