Imax is due for a rally as Hollywood continues getting back on track after last year’s strikes, according to Seaport Research Partners. Analyst David Joyce initiated coverage of the stock, known for its large movie screens, at a buy rating. Joyce’s $23 price target implies the stock can rally 30% from Tuesday’s closing level. Joyce called Imax a small-cap way to play the normalization of the film industry after joint strikes from writers and actors last year stalled production and delayed some releases. He noted that even a few strong years in the near future with double-digit growth wouldn’t bring the box offices back to pre-pandemic levels, underscoring the room to run in this recovery. On top of that, the company should also grow its share within the box office as customers have shown an increasing interest in unique experiences, he said. “We think there is a distinct near-term opportunity for IMAX shares to start to recognize that the film industry’s theatrical release schedule will start heading toward normalcy,” Joyce wrote to clients in a Wednesday note. Joyce also pointed to expansion opportunities, particularly on the international front, as another reason for optimism about the company’s future performance. Imax typically grows its network base by between 5% and 6% each year, he said. The analyst also believes the stock is not trading like an “experience economy” play, despite fitting the mold. And if investors begin to value it like a live entertainment, sports or experiences-focused company that could mean upside of as much as 44%, the analyst said. Indeed, he said it’s not fair to look at the business like studios, streamers or other legacy media, due to challenges around subscriber headwinds and large content investments that don’t apply to Imax. At the same time, he said, it shouldn’t be evaluated alongside theatrical exhibitors given its miniscule share of the amount of total movie theater screens. Joyce’s call comes ahead of Imax’s second-quarter earnings report on Thursday. Shares have had a solid year, jumping more than 18% since 2024 began.
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