After the resolution of the Hollywood writers and actors strikes, the entertainment industry is experiencing changes and shifts in its forecasts and projections. As a result of the strikes and the recent delays of key releases by studios, industry experts like Eric Wold, an exhibition stocks analyst at B. Riley, are adjusting their projections for the box office.
Wold’s forecasts have been updated in a recent report, where he revises his industry box office projection for 2024 and 2025. He has taken a more conservative approach to his updated 2025 industry box office projection, citing the number of high-profile films that have been moved into that year. Wold notes that recent trends in performance have led him to lower his fourth-quarter domestic box office projection for 2023. The decline in domestic box office revenues compared to the same period in 2019 has contributed to this adjustment.
In light of the recent slate changes, including the rescheduling of highly anticipated movies like “Dune: Part Two” and Disney’s live-action “Snow White,” Wold estimates that there will be an adverse impact on 2024 domestic box office revenues, followed by a potential benefit to 2025 box office revenues. He has adjusted his 2024 and 2025 domestic box office forecasts accordingly. Despite these shifts, Wold remains cautious, emphasizing that the actual results may vary from the projections.
The industry expert also highlights the potential for stronger-than-expected results as the film slate firms up in the coming quarters. While Wold had previously based his stock price targets on his 2024 earnings estimates, he has now shifted that to 2025 in response to the post-strike slate changes.
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Despite the adjustments in forecasts and projections, Wold remains bullish on the exhibition sector and is positive about the outlook for the industry. His confidence in the industry’s future is reflected in his “buy” ratings on the stocks of Cinemark, Imax Corp., and Marcus Corp., with specific price targets for each. He also acknowledges the progress made by AMC Theatres and has a neutral rating on the shares, with a corresponding price target.
Looking ahead, the entertainment industry is navigating through a period of change and adjustment following the resolution of the Hollywood strikes. The shifting release schedules and the impact on box office revenues are elements that analysts and experts like Wold are closely monitoring. As the film slate continues to evolve and the industry adapts to these changes, it will be important to observe how it influences the box office in the coming years. Industry stakeholders will need to remain flexible and adaptable to navigate the evolving landscape of the entertainment sector.
