Cinemark Holdings Inc. hit the highest level since August after saying April 8 marked the strongest day of attendance for the chain since Christmas Day 2019 with the openings of Super Mario and Air, a film about Nike Inc.’s courtship of Michael Jordan. Imax Corp. closed at the highest in more than a year after announcing that Super Mario spurred its best opening weekend ever for an animated film with $21.6 million. 

Meanwhile, AMC Entertainment Holdings Inc. closed up 6.9% following news that the weekend was the company’s third best since December 2019. Movie-theater operator Marcus Corp. followed the group higher, closing up 7.7% for its biggest gain since September 2021.

The four stocks have each notched double-digit gains so far in 2023 after several volatile years as the cinema industry slowly recovers from pandemic restrictions. The late 2022 release of Avatar: The Way of Water helped power the theater chains’ strong start to the year.

Domestic box office revenue for the first quarter of $1.7 billion was about 2% above B. Riley Securities analyst Eric Wold’s projection, he wrote in a research note Monday. While it’s still just about 72% of first quarter 2019 levels, it ties for the highest quarterly box office recovery level since the pandemic, matching fourth quarter 2021, when Spider-Man: No Way Home was released, he wrote.

Wold views the recent strength in theater stocks as a sign that there is increased optimism around the box-office outlook. He boosted his 12-month price targets for Cinemark, Imax and Marcus, while reiterating his buy ratings. Wold has a neutral rating on AMC. 

As theater chains continue to show progress toward returning to pre-pandemic revenue and profitability levels, “investors will feel more comfortable not only assigning pre-pandemic average valuation multiples to the stocks, but also looking forward to 2024/2025 estimates as the recovery is anticipated to more fully take hold on results,” he wrote.

— With assistance from Katrina Lewis and Janet Freund.