Analyst Eric Wold of B.Riley Financial reiterated a Buy rating on Marcus (MCS – Research Report), retaining the price target of $19.00.
Eric Wold has given his Buy rating due to a combination of factors that indicate the current undervaluation of Marcus Corporation’s (MCS) stock and the anticipated recovery and growth prospects in both its theater and hotel segments. Despite the first-quarter results falling short of expectations, Wold believes this underperformance is temporary and largely due to the challenging box office slate and year-over-year comparisons, which are expected to persist until the third quarter of 2024. He is confident that the box office pressures are a result of mix and calendar effects rather than a fundamental decline, and he projects a strong recovery with significant gains post-pandemic.
Furthermore, Wold remains optimistic about Marcus’s hotel segment, which is expected to benefit from the upcoming expansion of the Milwaukee Convention Center. He notes that although there was a slight year-over-year decline in the average daily rate, Marcus’s properties outperformed local competitors, suggesting robust underlying performance. The anticipated convention center boost, coupled with Marcus’s strategic location and refreshed hotel offerings, is expected to drive wider gains, reinforcing the Buy rating and a price target of $19. Wold’s analysis underscores the potential for revenue shifts towards 2025 and continued market share gains, which he believes are not currently reflected in the stock’s valuation.
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Marcus (MCS) Company Description:
Marcus Corp. engages in operating movie theatres, hotels, and resorts. It operates through the following business segments: Theatres and Hotels & Resorts. The Theatres segment includes multiscreen motion picture theatres and a family entertainment center. The Hotels & Resorts segment owns and operates full service hotels and resorts. The company was founded by Ben Marcus on November 1, 1935 and is headquartered in Milwaukee, WI.
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