‘Wonder Woman 1984’ Opening Boosts Movie Theater Stocks As 2021 Hopes Rise

The better-than-expected Christmas-weekend opening of Wonder Woman 1984 is giving most exhibition stocks a welcome boost as the misery of 2020 gives way to hope for a brighter 2021.

Shares in Cinemark, Imax, Marcus Corp. and National CineMedia are up between 4% and 7% apiece after the sequel took in $16.7 million domestically, the best bow by any film during the coronavirus pandemic.

AMC, the world’s largest theater circuit, has hovered near the break-even point at $2.50 a share, while Regal Cinemas parent Cineworld mustered just a 1% gain on the London Stock Exchange. In AMC’s case, investors continue to fear a potential end to the company’s liquidity or even a bankruptcy filing.

Shares in the better-situated Cinemark, by contrast, are up 7% to their highest level since early June.

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WarnerMedia has elicited a fierce industry backlash by putting not just WW84 but its entire 2021 slate on streaming service HBO Max at the same time it hits theaters. The company reported strong viewership on HBO Max over the weekend but has not released any new subscriber data. The economics of releasing major tentpoles without the hundreds of millions of dollars generated by theaters are significantly more challenged.

Analyst Eric Wold with B Riley has predicted that Warner Bros will reverse course on its streaming plan. In a note to clients today, he called the film a “loss leader” designed to prop up HBO Max. Its box office confirms Wold’s belief that “movie watchers want to become moviegoers.” Despite being able to play in 23% fewer theaters than Warner Bros’ Tenet in September, WW84 far outdid the Christopher Nolan film’s $9 million debut. (Imax locations contributed 7% of domestic grosses and 10% on a global basis, he noted.)

“Considering the major, high-volume moviegoing markets of NYC, LA, and SF remain closed and the theaters in operation are still facing 50% capacity restrictions, we estimate the $16.7M opening for WW84 could actually equate to as much as $110-120M box office opening under normal circumstances,” Wold wrote. “The original Wonder Woman released in 2017 generated $103M in opening weekend box office. We believe this helps support the thesis that when consumers are allowed back to theaters with attractive content, they will once again become moviegoers—with the industry having the potential to begin returning to normal in 2022.”

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