Box Office Set For $9.5 Billion 2025 Comeback As Netflix Reshapes Industry, Analyst Says
Analysts turn their focus to the 2025 movie season, offering box office predictions as the industry grapples with the continued rise of streaming platforms.
JPMorgan 2025 Outlook: The movie theater industry could be normalizing after facing the COVID-19 pandemic disruption and labor stoppages, JPMorgan analyst David Karnovsky said in a new investor note.
"The key headwind for theaters remains supply – COVID and strike-related production shutdowns hampered output, and while the impacts are yet to be fully overcome, the lack of ongoing constraints sets up the conditions for a full recovery in volume by 2026 or 2027," Karnovsky said.
The analyst forecasts the North American box office to hit $9.50 billion in 2025, up 10.8% year-over-year. Broken down by quarter, Karnovsky's predictions are as follows:
- Q1: $1.77 billion, +9.7% year-over-year
- Q2: $2.44 billion, +25.1% year-over-year
- Q3: $2.57 billion, -3.7% year-over-year
- Q4: $2.73 billion, +16.2% year-over-year
While the report does not share price targets for movie theater stocks, Cinemark Holdings (NYSE:CNK) and IMAX Corporation (NYSE:IMAX) are named in the report. AMC Entertainment Holdings (NYSE:AMC) would be another stock to watch, given the potential increase in domestic 2025 box office revenue.
"While our forecast builds for significant growth, we believe it is below some of the more bullish estimates for $10b-plus which followed strong performance during the holiday period."
The analyst said he remains constructive on the movie theater industry given the rise of the streaming market, specifically increased film output from Netflix Inc (NASDAQ:NFLX). The rise of Netflix and streaming platforms has shortened theatrical release windows for movies.
"While these forces have delivered real stress to the ecosystem, with some hindsight, it appears many of the bear theses that existed pre-pandemic were overblown."
The Walt Disney Company (NYSE:DIS) is also featured several times in the report, with Karnovsky highlighting upcoming movies like "Zootopia 2," "Snow White," "Lilo & Stitch," "Captain America: Brave New World," "Fantastic Four" and "Avatar: Fire and Ash."
Disney is also highlighted for the early 2026 outlook with movies like "Toy Story 5," a live-action "Moana", "Avengers: Doomsday" and "The Mandalorian & Grogu."
Read Also: Disney Hits $2 Billion Domestic Box Office, Earns Top Honors
Goldman Sachs on Movie Theater Stocks: Goldman Sachs analyst Stephen Laszczyk has a domestic box office revenue estimate of $9.4 billion for 2026.
Laszczyk projects a recovery to 82% of 2019 revenue levels, after which earnings would likely remain range-bound.
In the recent report, the analyst highlights IMAX and Cinemark as the two covered stocks in the sector.
The analyst has a Sell rating on Imax with a $16 price target. Despite the sell rating, the analyst sees several scenarios that could provide upside risk to the rating.
"Box office demand could recover more quickly and on a larger scale than expected," Laszczyk said.
The analyst said movie theaters could look to add more Imax screens. A change in China's policy to allow more American blockbusters in the country could also benefit Imax, the analyst added.
"IMAX may benefit from uplifts in ticket prices as studios and exhibitors look to increase revenue."
The analyst also has a Sell rating on Cinemark with a $24 price target.
Similar to Imax, the analyst said there are several scenarios that could provide upside for the movie theater stock.
Along with box office demand recovering faster than expected, the analyst said better food and beverage margins and lower operating expenses could help Cinemark.
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