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Cinema attendance offers hope for the economy


Cinemas operators have faced significant challenges over the past five years, primarily due to the impact of Covid and its many lockdowns. Intensifying competition from Netflix and other streaming services has also negatively affected industry demand. According to IBISWorld, industry operators have responded by investing in new equipment and promoting new experiences to attract patrons back to cinemas.

Research from Roy Morgan shows that cinema attendance has soared by 77% in early 2022 as Australians have flocked back to see blockbusters such as Spiderman and Batman. In the March Quarter 2022, cinema attendance increased by 77% over the prior quarter with 3.9 million people attending the cinema in an average four weeks.

The report says, “The large growth in cinema attendance this year has seen large increases across key demographics and driven attendances to easily their highest since the pandemic began early in 2020. Women’s attendance at the cinema is up a spectacular 88% for the March quarter 2022 compared to the prior quarter, whilst men are up by 67%.” 

  • Roy Morgan report

    The better-than-expected figures suggest this year will be a bumper year for the cinema industry. Here are a few cinema stocks.

    • Event Hospitality and Entertainment (ASX:EVT) 
    • AMC Entertainment Holdings (NYSE:AMC)

    Event Hospitality and Entertainment (ASX:EVT)  – Citi has a Buy recommendation with a target price of $18.35. The broker sees upside to its FY23 Hotel revenue and profit forecasts for Event Hospitality & Entertainment, as hotels are recovering quicker than expected.

    The broker goes on to say, “The company is materially undervalued for a number of reasons including strong pent-up demand as travel restrictions ease. Also, structural concerns regarding cinemas are believed to be less than originally thought.”

    Ord Minnett has a Buy recommendation with a target price of $18.72. The 1H results have several positives revealed about the company which had come in better than expected. The broker points out that it was lucky that domestic cinemas were open when two blockbusters were screening. The broker says the business is in “a strong position to leverage a recovery in travel.” Buy recommendation retained.

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