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Hard to predict recovery for Cineworld but cinema still plays role for consumers, Barclays says

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Cineworld PLC (LON:CINE) got its recommendation reinstated at ‘equal weight’ with 115p target price by Barclays as cinema is still playing a role in the cultural landscape.

Vaccine newsflow is encouraging, but until consumers have a full content offering it is very hard to predict the trajectory of recovery, analysts said.

READ: Cineworld prospects finely balanced, says London bank

That’s also because COVID-19 has clear implications on when films will be released.

“However, far from being the death knell of cinemas, the pandemic has shone a light on the important role cinema plays in creating interest in high profile content for when it is available in the consumer’s home,” the bank said.

A shorter release window creates less revenue for cinemas, but in 2019 the top-20 releases generated 89% of their box revenue after 31 days, and 95% of revenue after 45 days.

Analysts said this would be a headwind but not a game-changer for the wider industry.

Earlier this week, Odeon Cinemas confirmed it will reopen most of its 120 sites on 17 May.

The group, which is owned by US-listed AMC Entertainment, said the reopening would be with appropriate safety measures in place.

These will include facemasks unless people are eating or drinking, and limited seating to allow gaps between customers.

Shares in Cineworld rose 1% to 94.84p on Wednesday at noon.

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