Shares in entertainment firm Cineworld (CINE) rallied more than 15% to 73p after its latest trading update showed film-lovers flocking back to its UK cinemas in greater numbers than before the pandemic.
The company pinned the recovery on the strong slate of third quarter film releases and pointed to the list of ‘blockbusters’ still to come before the end of this year.
THE NAME’S BOND
Till receipts for last month were 27% higher than October 2019 at the firm’s UK and Irish cinemas compared with only half the two-year-ago level as recently as June.
Takings in the US were at 80% of 2019 levels compared with less than 50% over the summer, while rest of the world revenues were steady at around 80% of two-year-ago levels.
Among the biggest draws for cinema-goers were the latest film in the James Bond franchise, ‘No Time To Die’, as well as a remake of the sci-fi classic ‘Dune’ and the latest instalment in the Marvel franchise, ‘Black Widow’.
Still to come is the hugely-anticipated ‘Spider-man: No Way Home’, another release from the Marvel MCU stable, along with ‘The King’s Man’, ‘Ghostbusters: Afterlife’ and ‘The Matrix Resurrections’, which the firm said would lead to a strong fourth quarter.
STILL UNLOVED
Out of the 10 analysts covering Cineworld, six have a hold recommendation, two have sells and just two have buys, which puts the stock towards the very bottom of the rankings on broker sentiment.
The stock is also the most shorted in the UK market according to the shorttracker website with nearly 8% of its shares out on loan. Short sellers borrow shares from institutions in order to sell them in the hope of making a profit by buying the shares back later at a lower price.
Today’s bounce will have ruffled a few feathers among the shorts but given the shares were trading above 700p back in 2017 it would take a much bigger squeeze in the price to eat into their gains.
