The Cineworld share price has been in the red since the start of September. The CINE stock is still hovering more than 50% below its highest level this year in March. The stock has declined more than 12% since the start of the month. It has a total market capitalization of £855 million.
CINE Fundamental Outlook
Cineworld Group (LSE: CINE) is a British cinema chain. The company operates in key countries such as the United States and the United Kingdom. Cineworld is the largest cinema exhibitor chain in the UK. It was also ranked as the world’s second-largest cinema chain after purchasing Regal Cinemas in 2017. Its biggest competitor is AMC Entertainment, the world’s largest cinema chain.
The company recently stated that it would pay $170 million to Regal Entertainment shareholders who were dissatisfied with the price they received when the US chain was taken over by Cineworld.
Cineworld is also in a legal battle with Cineplex over an aborted takeover. Cineplex is a Canadian entertainment company. CINE had planned to purchase the Canadian cinema chain before the onset of the coronavirus pandemic. However, once the pandemic struck, the company scrapped the deal.
The company has been on a bumpy ride since the onset of the pandemic that saw it burn through cash as cinemas were shut due to restrictions. The company’s current financial position is concerning. At the end of the first half of 2021, Cineworld had a debt of around $5 billion and interest costs worth $343 million.
However, according to investors, a US listing could be a major turnaround for the Cineworld share price. Once the company reduces its debt, its outlook will significantly improve.
CINE Technical Analysis
The daily chart indicates that the Cineworld share price has been on a strong bear run for the past two weeks. At the time of writing, the stock was slightly higher at 62.20p.
It is trading below the 25-day and 50-day exponential moving averages, which is a bearish indicator. Its Relative Strength Index (RSI) has been declining. With an RSI of 39, the stock is close to the oversold region, reinforcing the bearish outlook further.
The CINE stock is likely to edge lower in the near term. However, the new blockbuster releases scheduled later this year are likely to rescue its price.