The Motley Fool

What’s going on with the Cineworld (CINE) share price?

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Cineworld cinema
Image source: DCM

Since the middle of July, the Cineworld (LSE: CINE) share price has been treading water. It has traded in a range between 67p and 61p for much of the past two months as buyers and sellers have been fighting for control. Despite this recent tug of war, over the past 12 months, shares in the company have added 15%. 

Considering its recent trading performance, I have been wondering what is going on with the Cineworld share price and if anything could drive the stock higher in the near term.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Upcoming catalyst 

The company’s performance in the first half of the year was dismal. The impact of global lockdowns took their toll on the enterprise. It reported an earnings before interest, tax, depreciation, and amortisation (EBITDA) loss for the period of $21.1m. Meanwhile, the group reported a monthly cash burn of $45m. 

So far, there has not been much to attract cinemagoers back into theatres. However, that will change in the second half, with a slate of big blockbuster movies set to arrive on the big screen. 

The long-awaited James Bond film, No time to die, is one of the most anticipated releases of the past few years, and Cineworld’s management will be looking to this title to provide a boost for the group in October. 

What does this mean for the Cineworld share price? I think the market is waiting to see how cinemagoers react to these new releases before pushing the stock higher. 

The group currently faces some significant challenges, including high levels of debt and the rise of online streaming. The company needs to prove that it still has something customers want, which could be pretty tricky. 

Cineworld share price challenges

The way I see it, investors are currently approaching the Cineworld share price with caution. It is facing significant headwinds, and the company needs to prove that it has what it takes to overcome these issues. 

Management should provide an update on the company’s progress later in the year, and if this is positive, I expect the Cineworld share price to head higher. 

However, if the update disappoints, investors could start to sell the stock again. After all, there are plenty of other recovery stocks on the market which are experiencing faster comebacks. Cineworld is not the only business that has recovery potential

Considering all of the above, I would not buy the stock. I think it has been trending sideways because investors are waiting for further information from the company detailing its recovery.

Unfortunately, at this point, when the company does update the market, there is no guarantee it will be a positive update. If cinemagoers fail to come back in large numbers, trading figures may disappoint, and this could even make it difficult for Cineworld to sustain its borrowing. 

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you'll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.