What is an analyst upgrade and why does it matter?

An analyst upgrade is when a financial expert raises their rating on a stock, suggesting improved prospects. In this case, Wedbush upgraded AMC to "Outperform," indicating they believe the stock will do better than the overall market. These upgrades matter because they can influence investor sentiment, potentially driving up stock prices as more people buy based on the new recommendation. For cinema stocks, this upgrade signals a significant shift in how Wall Street views the industry's recovery.

Why are movie theaters making a comeback after streaming's rise?

Movie theaters are experiencing a revival for several reasons. Many consumers are seeking social, out-of-home experiences after years of at-home entertainment. Studios have realized that theatrical releases often create more buzz and higher overall revenue for their films compared to direct-to-streaming releases. Additionally, premium formats like IMAX offer experiences that can't be replicated at home. This doesn't mean streaming is going away, but rather that theaters and streaming can coexist, with theatrical runs enhancing a film's overall value.

What does "box office" mean in investing terms?

The "box office" refers to the total amount of money generated from ticket sales for movies shown in theaters. When investors talk about "box office performance," they're discussing how much revenue films are generating through ticket sales. Strong box office numbers typically benefit theater companies like AMC and CNK directly, while also indicating health in the broader entertainment ecosystem. For investors, rising box office numbers can signal increasing consumer spending on out-of-home entertainment, which can positively impact various stocks in this theme.

How do companies like IMAX and Dolby (DLB) connect to movie theaters?

IMAX and Dolby provide the premium technology that enhances the theatrical experience. IMAX offers larger screens and specialized projection systems that create immersive viewing experiences. Dolby provides advanced audio and visual technologies (like Dolby Atmos sound systems and Dolby Vision projection) that theaters license to offer premium screenings. When more people go to movies, especially premium-format showings which cost more, these technology providers earn more through licensing fees, equipment sales, and revenue-sharing arrangements with theaters.

Why are casino stocks like CZR and PENN included in a cinema revival theme?

Casino stocks are included because they benefit from the same broader consumer trend: increased spending on out-of-home entertainment experiences. When people show willingness to spend money at movie theaters again, it often indicates they're also more likely to spend on other entertainment venues like casinos, theme parks, and live events. This connection makes these stocks complementary plays on the overall revival of in-person entertainment spending. Both industries are cyclical and tend to perform well during periods of strong consumer confidence and discretionary spending.

15 handpicked stocks

Box Office Revival

A carefully selected collection of stocks poised to benefit from the resurgence of movie theaters. After years of uncertainty, Wall Street is showing renewed confidence in cinema, with Wedbush's recent AMC upgrade highlighting this shift. These professional picks span theater chains, technology providers, and studios ready to capitalize on rising box office numbers.

Han Tan | Market Analyst

Updated 2 days ago | Published at juillet 14