Cineworld plc, national cinema chain are ahead of expected total revenue by 13.9 pct. The UK's second largest cinema chain after Odeon, Cineworld has seen a growth of 13.9 pct mainly due to box office revenue from the success of films like Avatar and Alice in Wonderland.
"At this stage CINE is tracking ahead of our FY assumptions...as a result we retain our Buy recommendation." said Greg Feehely of Altium Securities.
The broker recommends the shares due to 'gearing up' of screen advertising after the economic recovery despite the lack of big 3D 'blockbuster' films in the short-term. Competition with the World Cup is also expected to impact business:
"Ahead of this tournament Robin Hood, Prince of Persia an Sex in the City 2 will all be on general release. The H2 line up is strong including Shrek Forever After (3D), The Twilight Saga: Eclipse (3D), Toy Story 3 (3D), Harry Potter Deathly Hallows 1 (3D) and Chronicles of Narnia:Voyage of the Dawn Treader."
3D films contribute more as viewers pay a premium, Avatar alone is boosting revenue as 3D films contribution increased by 25 pct for the 18 weeks to 6 May.
"Market share advanced from 23.6 pct to 24.0 pct." adds Greg, giving a target price of 230p.