Wall Street thinks IMAX is ripe for a sale. Here’s who could buy it

Wall Street is buzzing following reviews that IMAX is exploring a sale.

Shares of the movie show know-how firm had been up roughly 14% Friday on hypothesis about potential patrons. A supply aware of the corporate instructed CNBC that IMAX has held “preliminary talks” by means of intermediaries, however no official pitches have been made by the corporate.

CNBC’s supply spoke on the situation of anonymity as a result of confidential nature of the discussions. The Wall Street Journal first reported the potential sale course of.

Whereas IMAX is probably not actively pursuing a sale, CEO Wealthy Gelfond has left the door open for a attainable buyout. In December, he instructed shareholders throughout the firm’s investor day that IMAX is “an extremely priceless participant, both as a wholly differentiated publicly-traded firm or as a part of a bigger firm.”

Wall Street analysts broadly see IMAX as a pretty asset that could draw curiosity from a number of companies, from Hollywood studios and theatrical companions to fellow tech firms. A number of analysts wrote that IMAX is presently undervalued.

“IMAX is a uncommon mixture of a globally acknowledged premium model, an asset-light licensing mannequin, and a structurally increasing earnings profile,” Wedbush Senior Vice President of Fairness Analysis Alicia Reese wrote in a analysis notice printed Friday. “IMAX is buying and selling at a low cost to what we imagine the enterprise is price as a standalone entity, not to mention as a strategic acquisition goal.”

As of noon Friday, IMAX shares had been buying and selling at practically $39 apiece for a market capitalization of roughly $2.1 billion.

“A potential acquirer could be shopping for some of the defensible moats in leisure for what quantities to a rounding error on the steadiness sheet of any main studio or know-how platform,” Reese wrote.

Reese advised that IMAX’s almost definitely suitors would come with non-public fairness, Netflix, Apple and Sony.

Non-public fairness would keep away from any potential battle points, as there could be no competing curiosity for screens, she famous.

Netflix, in the meantime, doesn’t depend on theatrical releases as a part of its fundamental programing technique, due to this fact its battle of curiosity could be smaller than conventional Hollywood studios. Moreover, proudly owning IMAX would offer any filmmaker that signed on to work with Netflix the chance for premium theatrical runs and could act as a “highly effective recruiting device,” in keeping with Reese.

As for Apple and Sony, each firms have robust know-how companies along with theatrical and streaming content material. Though, Sony doesn’t have its personal streaming platform, whereas Apple has AppleTV.

“We’d be shocked if any of the foremost Hollywood studios pursued an acquisition of IMAX given the competitors with different studios for key IMAX launch home windows (and the probability that a studio wouldn’t wish to share field workplace with one other studio),” Eric Wold, government director of fairness analysis at Texas Capital Securities, wrote in a notice to buyers printed Thursday. “By the identical token, we don’t imagine any of the foremost exhibitor circuits would need one other circuit to regulate the IMAX launch slate and in addition share in its field workplace revenues.”

The potential purchaser pool could be a lot wider, in keeping with Mike Hickey, a Benchmark fairness analysis analyst.

“We imagine the potential purchaser universe is unusually broad as a result of IMAX operates much less like a conventional theater chain and extra like a premium leisure know-how platform,” he wrote in a notice printed Friday. “Logical strategic candidates embrace Sony, Apple, Amazon, Disney, Comcast/NBCUniversal, Netflix, Sphere Leisure, and Cinépolis, alongside sovereign-backed leisure buyers.”

Final 12 months, IMAX generated a report $1.28 billion on the world field workplace, a greater than 40% improve over 2024 and 13% greater than its earlier report set in 2019.

Wold is projecting income of $448 million in 2026, greater than the $396 million the corporate collected in 2019. Moreover, he expects adjusted revenue to achieve $197 million, up from $149 million in 2019.

Nevertheless, whereas IMAX is outperforming its 2019 metrics, its valuation has not returned to pre-pandemic ranges, Wold famous. He reiterated that his worth goal for the corporate is $53 a share.

IMAX hit a 52-week excessive in late February, buying and selling at $43.16 a share, however the inventory has retreated following powerful first-quarter comparisons to 2025, which included the record-breaking efficiency of China’s “Ne Zha 2.”

Moreover, the corporate misplaced Greta Gerwig’s “Narnia” movie from the Thanksgiving vacation following an on-set damage that postponed manufacturing, resulting in a vital hole within the calendar. IMAX has since changed the movie with David Fincher’s “The Adventures of Cliff Sales space,” based mostly on the breakout character from Quentin Tarantino’s “As soon as Upon a Time in Hollywood.”

The corporate nonetheless has Common and Christopher Nolan’s “The Odyssey” and Warner Bros.‘ and Denis Villeneuve’s “Dune: Half Three,” due out in July and December, respectively, that are each anticipate to generate a significant slice of field workplace gross sales from IMAX screenings. That is along with Disney’s “Toy Story 5” and “Moana,” alongside Warner Bros.’ “Supergirl,” Lionsgate’s “Starvation Video games: Dawn on the Reaping” and Common’s “Minions & Monsters.”

“In 2027, the corporate has at the least 10 filmed for IMAX titles, together with Narnia and a good mixture of core franchises (Star Wars, Superman, Batman) and different movies like ‘The Thomas Crown Affair’ and ‘Miami Vice’,” wrote Steve Frankel, senior analysis analyst for Rosenblatt, in a notice printed Friday. “Past Hollywood, the corporate’s slate of native language titles continues to broaden, together with a number of titles Filmed for IMAX and different content material, like dwell broadcasts of F1 races, continues to fill in gaps within the schedule.”

IMAX’s “filmed for IMAX” content material is accelerating and anticipated to develop materially by means of 2028. Moviegoers are drawn to titles which have been filmed on IMAX cameras with the intention of being proven on the bigger, extra spectacular screens. Earlier titles embrace Nolan’s “Oppenheimer,” James Cameron’s and Disney’s Avatar movies, in addition to entries within the Marvel Cinematic Universe and from DC Studios.

However IMAX is additionally diversifying past the Hollywood panorama. Internationally, it has partnered with China, Japan and South Korea to display native language content material. In doing so, the corporate had lowered its dependence on any single market or single content material supply, Reese famous.

The corporate is additionally actively increasing. Round 160 to 175 IMAX programs are anticipated to be put in in 2026, with contracts to construct a whole bunch extra already in place, the corporate instructed CNBC final 12 months.

“We proceed to be believers within the IMAX story,” Frankel wrote. “The mix of the continued client shift to premium viewing experiences, the corporate’s rising affect with main filmmakers and a movie slate that has diversified past Hollywood tent poles to incorporate native languages and different content material, units the stage for robust field workplace progress and margin growth.”