IMAX Corp (NYSE:IMAX) is exploring a sale and has approached entertainment companies as potential buyers, the Wall Street Journal reported on Friday, sending shares of the premium cinema operator up 14.2%.
The process is early and may not lead to a deal, according to the report.
IMAX has seen its share of domestic box office sales grow to 5.2% last year from 3.2% in 2019, as premium large-format screenings gain ground with moviegoers.
Wedbush analysts, who have IMAX on their Best Ideas List with an Outperform rating and a $46 price target, said the company represents a rare combination of a globally recognized premium brand, an asset-light licensing model, and a structurally expanding earnings profile.
At roughly $2 billion in enterprise value, Wedbush said a prospective acquirer would be buying "one of the most defensible moats in entertainment" for what it described as a “rounding error on the balance sheet of any major studio or technology platform.”
Wedbush identified private equity, Netflix, Apple and Sony as the most likely potential suitors. The analysts noted that private equity would avoid platform conflict issues entirely, while Netflix's content calendar and Apple TV+'s prestige content ambitions could both benefit from guaranteed premium theatrical showcases.
Sony, which has no streaming platform, relies on theatrical as its primary monetization window in a way that is structurally different from other studios, Wedbush added.
Even without a deal, Wedbush said IMAX stands to benefit as a standalone company from an increase in filmed-for-IMAX titles between 2026 and 2028, greater reliance on local language content in its global box office, expanded alternative content, and continued growth of its global footprint.
The analysts said IMAX is on track to surpass 50% EBITDA margins by 2028.