Analyst Note
| Neil Macker, CFA |Imax posted a slightly weak third quarter, with revenue meeting and EBITDA missing the FactSet consensus. Quarterly box office grosses continued to rebound, up 25% year over year, but remained well behind the third quarter of 2019 due primarily to ongoing weakness in China. The Chinese Imax box office fell versus 2021 for the third quarter in a row, as the government remains parsimonious in Hollywood film approvals and theaters across the country stayed shut down due to COVID-19-related restrictions. While we still project that larger blockbusters remaining in 2022 should help Imax to return closer to 2019 box office grosses in the U.S., we now expect the China box office to take until 2024 to return to 2019 levels. We lower our fair value estimate to $19 from $22 to account for the slower rebound and margin expansion.