MCS - Marcus Corporation: No Catalyst To Unlock Real Estate Value; Maintain Hold
2024-05-24 06:05:55 ET
Summary
- The Marcus Corporation's stock has fallen by 30% since the last analysis, reaching a level last seen during the COVID-19 pandemic.
- The company's real estate assets are undervalued by the market, estimated to be worth $15 per share.
- However, there are no catalysts in sight to unlock the value of the real estate assets.
- Investors will likely have to wait until 2025 when a better film slate will likely improve sentiment towards the sector.
Every few months, I like to revisit the companies and stocks I have written about to see if my analysis has been correct. When I last wrote about The Marcus Corporation ( MCS ), I was cautious about the company's prospects as movie theatre attendance had only recovered to ~80% of 2019 levels, which translates into structurally lower earnings for the company. Unfortunately, my thesis continues to play out, as MCS's stock has fallen by another 30% since my article (Figure 1).
Figure 1 - MCS has declined by 30% since November (Seeking Alpha)
However, with the company's shares now trading at ~$10 and change, a level last seen in 2020 when most of the United States was locked down due to the COVID pandemic, one has to wonder whether investors have gotten too pessimistic about MCS (Figure 2)....
Marcus Corporation: No Catalyst To Unlock Real Estate Value; Maintain Hold