Captain Marvel has pumped life back into the domestic box office, delivering an epic $153 million opening weekend debut, while hauling in $455 million worldwide. AMC Entertainment Holdings Inc. (AMC) has been struggling as of late on the heels of a record-breaking year at the box office in 2018 in conjunction with the disastrous stock market in Q4 of 2018. Despite a robust slate of movies for 2019, the year has been off to a sluggish start at the box office. AMC will likely have a nice catalyst as the slate of 2019 movies roll out, and the box office numbers strengthen. To smooth out these box office revenue fluctuations, AMC has a rapidly growing loyalty program with over 700,000 members to evolve a large segment of its business mix towards a subscription-based model. This will allow durable and predictable revenue streams in the backdrop of changing box office dynamics. AMC offers a great dividend yield of over 5% and accelerating revenue and EPS growth. The company is reengaging the consumer via digital, mobile and loyalty program options, reformatting theaters to enhance the user experience and international expansion augmented by a healthy share buyback program. The stock looks very attractive considering its depressed valuation, solid Q4 earnings that drove the stock higher and company initiatives to drive the consumer experience. The long term growth narrative remains intact while revenue continues to grow at a healthy clip.
2019 Box Office Finally Jolted
Disney (DIS) has finally released its first highly anticipated film of 2019 with Captain Marvel (the first female lead for a Marvel film). The film has performed exceptionally well, delivering an opening weekend box office gross of $457 million worldwide and $153 million domestically (Figure 1). The first two months of the year for the domestic box office has been a struggle relative to 2018. Captain Marvel brought in the third highest March opening of all-time and places the film on par with past blockbusters such as The Dark Knight, The Hunger Games and Rouge One. Dumbo, Avengers 4, Aladdin, Toy Story 4, Lion King, Frozen 2 and Star Wars Episode 9 is Disney’s slate of films that will bode well for the box office on the domestic front as these films stand to rack in billions in box office receipts. It’s noteworthy to point out that Disney is poised to defend its box office dominance again in 2019 for the fourth consecutive year. Continue reading "AMC - 10% Post Earnings Pop And Captain Marvel Catalyst"