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What’s happening with the Cineworld share price?

An illuminated Cineworld sign
Image source: DCM

The Cineworld (LSE: CINE) share price has been on fire recently. At the time of writing, the shares have risen over 23% in the last five trading days, reaching beyond 80p. This marks a huge monthly run after several months of disappointing performance. However, it’s still a long way off its 52-week high of 124p, which we were able to see in March. So… what’s happening?  

Bond is back

Cineworld is a company that has been hit hard by the pandemic, but as things started opening up again, audiences began to return to the cinema. Recently the Cineworld share price has benefitted from the imminent release of the new James Bond film, No Time to Die. The film only hit cinemas today, but tickets have been on sale since September 13th. There are reports that the film has generated the most interest in cinema tickets since before the pandemic. Ticket sales already seem to be strong, which is a good sign that the film may generate significant revenues for Cineworld. There is no doubt in my mind that many investors have begun to price this into the Cineworld share price, making it at least part of the reason behind Cineworld’s recent rally.

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That’s not all…

As well as a strong push from Bond, Cineworld may also take home strong revenues from, what seems to be, a slew of blockbusters making their way to cinemas in late 2021, and early 2022. Huge franchises such as Marvel, The Matrix, Ghostbusters, and Kingsman will have films hitting Cineworld screens within the next few months. Many of these film releases have been delayed due to the pandemic, and are likely to bring some audiences back for the first time since lockdowns have began to lift. This seems especially important for Cineworld as the company only managed to open all of its venues for the first time in June. It seems clear to me that many of these releases will provide significant cash for the business, providing a better outlook for Cineworld. Apparently investors seem to think so, as these releases are likely to be another factor in the movements of the Cineworld share price.       

What could be next for the share price?

In my opinion, where the Cineworld share price goes next, depends on a few factors. One straightforward factor will be the success of upcoming film releases. If these releases bring good or bad surprises, investors will react accordingly. Another factor will be the long-term impact of the pandemic on audiences. During lockdown, many people turned to streaming services for entertainment. After using these services, some found the cheaper ‘at home’ experience better than going to the cinema. Many now fear that consumer demand for a cinema experience will be altered forever. However, if there is a clear interest in cinema tickets for upcoming films, I think most investors can rest easy knowing that a solid portion of demand still remains. Regardless, I think this will be an interesting quarter for the Cineworld share price.      

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Kevin Diamond 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.

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