Aravinda Galappatthige, an analyst from Canaccord Genuity, maintained the Hold rating on Cineplex. The associated price target was raised to C$13.00.
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Aravinda Galappatthige’s rating is based on several key considerations surrounding Cineplex’s recent strategic moves and financial outlook. The decision to sell its Digital Media business for $70 million was a positive step, exceeding market expectations and improving the company’s balance sheet. This sale is expected to lower Cineplex’s leverage ratios, thus enhancing its financial flexibility and potential for capital allocation, such as share buybacks.
Despite these positive developments, the Hold rating reflects a cautious stance due to limited upside potential and uncertainties regarding further asset sales. While the target price was raised to C$13, the modest adjustments in EBITDA and free cash flow projections suggest that the stock’s current valuation already reflects these improvements. Therefore, the Hold rating indicates a balanced view, acknowledging both the positive impact of recent actions and the challenges in achieving significant additional growth.
In another report released on October 9, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a C$11.00 price target.