National CineMedia Stock Soars Despite Bankruptcy Filing
Lede
National CineMedia's stock has quadrupled in just two days despite filing for bankruptcy, with investors focused instead on its positive revenue outlook.
Summary
- National CineMedia's stock has more than quadrupled in just two days after filing for bankruptcy, reaching a five-month high on record volume of 320.8 million shares.
- The surge in stock price follows National CineMedia's upbeat revenue outlook, with the company expecting to report Q4 revenue of $91.7 million, up 44.4% YoY, and operating income growth of 251.3%.
- Wedbush analyst Alicia Reese stated that National CineMedia is "fundamentally set up to rebound to pre-pandemic levels over time, with its premium and platinum inventory".
- National CineMedia's bankruptcy filing also disclosed that it experienced increasing demand as brands returned to cinema advertising to target young, diverse, and highly engaged moviegoing audiences.
- The company's pre-movie show, Noovie, is exclusively presented in 53 theater circuits in the US, including those from AMC, Cinemark Holdings, and Regal Entertainment Group.
- National CineMedia's bankruptcy filing has not deterred investors, with Wedbush analyst Alicia Reese reiterating her outperform rating and $3.50 stock price target.
- The company's stock has climbed 127.7% year-to-date but has fallen 78.6% over the past 12 months, while AMC shares have shed 47.2% over the same period and Cinemark's stock has slipped 0.2%.
- CEO Tom Lesinski said, "We are well-positioned to deliver on this momentum as theater traffic builds back towards normal historical patterns and our inventory utilization increases."