"Higher-than-usual demand" for Imax screenings of library content amid cinema reopenings in such markets as China "is a potentially solid early indicator of movie-going behavior coming out of the COVID-19 industry shutdown," says B. Riley FBR's Eric Wold.
Imax Corp.'s strong box office share with library titles, such as Harry Potter and the Sorcerer's Stone, which won the weekend in China, led one analyst on Monday to laud the company's "impressive" performance.
Reiterating his "buy" rating and $18 price target on Imax's stock, B. Riley FBR analyst Eric Wold wrote in a report: "Although the reopening of movie theaters within China initially has been driven by re-released library films, we believe the higher-than-usual demand for Imax screens with even this library content is a potentially solid early indicator of movie-going behavior coming out of the COVID-19 industry shutdown — and one that plays into our positive thesis around Imax Corp. as a beneficiary of both that behavior and a blockbuster-heavy film calendar over the next 12-18 months."
The Sorcerer's Stone this weekend dominated the Chinese box office with a $13.4 million take as Hollywood re-releases continue to look to entice people to return to recently reopened cinemas. That performance pushed the total weekend box office in the country to $21.9 million, the best performance since China's cinemas reopened four weeks ago with limits on the number of screens and strict social distancing measures due to the novel coronavirus pandemic.
Wold highlighted in his report: "Over this past weekend, the re-release of Harry Potter and the Sorcerer's Stone in China generated $2.1 million from 594 Imax screens, or 15 percent-plus of the film's overall box office total in the country."
In addition, the re-release of Inception globally generated $640,000 from 181 Imax screens, "or around 40 percent of the film's overall box office total of $1.6 million from 2,850 screens," the analyst noted. "While these percentages would be impressive for opening weekend box office revenues for major blockbuster films, we believe the fact they are being generated from films that are 19 and 10 years old, respectively, and available on numerous other formats is even more impressive."
Concluded Wold: "As consumers begin returning to theaters globally in the coming weeks (with U.S. theaters for the major circuits scheduled to open the majority of their locations this month), we have speculated that consumers would increasingly gravitate toward premium and higher-quality movie-going experiences, such as Imax."
Article written by Georg Szalai for The Hollywood Reporter.