European stocks opened higher in Thursday trading, achieving a fourth consecutive gain. The German DAX surged 0.7%, while the UK FTSE 100 gained 0.8%. The world’s second largest cinema chain, Cineworld, was also among the leading companies in early Thursday trading, with Cineworld Group’s shares climbing 29%.
The company stated that it conducted negotiations for a waiver on a debt covenant. The company gained additional liquidity, which will allow it to survive the year even if there is another pandemic wave forcing cinemas to close down.
Cineworld stated that lenders agreed to waive the company’s leverage covenant on its loan for the June 2020 testing date. As a result, Cineworld increased its leverage covenant to 9.0x net debt to EBITDA for the December 2020 testing date.
As businesses started resuming their activities, Cineworld announced its plans to reopen its UK-based cinemas in July. Boris Johnson, UK’s prime minister, stated that June 15 is the date when non-essential shops and independent businesses will be able to reopen in England. Despite that, facilities like hair salons, cinemas, libraries and bingo halls will not be allowed to resume their activities in June.
Even though cinemas still have not received the green light to reopen in the UK, if they take the right measures to ensure a safe environment for customers, they might be able to screen movies soon. Cineworld hopes that the lockdown measures will be lifted everywhere in the next few weeks and the chain will be able to reopen its cinemas in July.
Analyst stock price forecast and recommendation
According to MarketBeat, 90-day reports on the Cineworld Group stock show that analysts have a consensus price target of £265.38. These results show a potential upside of 179.6% from its current price of £94.91.
The same media also offers the recommendations of 14 investment analysts who have participated in a Cineworld Group stock survey. The company received a consensus rating of “Buy”, with 8 analysts ranking the stock as “Buy” and 6 – as “Hold”.
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