By Paul R. La Monica
With its play for Warner Bros. Discovery, Netflix is taking steps to further dominate the movie business. But no matter how this Hollywood drama plays out, big-screen movie theater operator IMAX should do just fine.
Netflix is expected to report solid financial results on Jan. 20, but investors will be listening for details about its contested purchase of Warner's streaming and studio assets. That deal has caused IMAX's stock to slump nearly 5% since it was announced on Dec. 5.
That's an overreaction. For one, Netflix should be seen as a partner to IMAX, not a competitor. IMAX will exclusively show Netflix's Narnia in theaters for two weeks starting this Thanksgiving before the film moves to streaming in time for Christmas. IMAX CEO Richard Gelfond thinks the company's big screens will remain a desirable destination for Hollywood blockbusters. "IMAX is going to be a winner," he said at an investor event in December. "I feel quite confident that we're in a good place."
The numbers back him up. IMAX enjoyed a much stronger year in 2025 than other theater chains. Overall box-office revenue in the U.S. rose only 1% from 2024, but IMAX said in early January that its domestic box-office sales were up 14% from a year ago to a new record, thanks in large part to the success of action-packed films such as Avatar: Fire and Ash, F1: The Movie, and Mission: Impossible -- The Final Reckoning.
IMAX is also taking customers from competitors, notes Eric Wold, a media analyst at Texas Capital Securities, with its box-office market share rising to 5.1% in 2025 from 3.9% a year earlier. "This points to the continued migration of consumers toward the best moviegoing experience -- which should benefit the company even more so with the very IMAX-friendly film slate on tap for 2026," explains Wold, who has a Buy rating and $47 target on the stock, up nearly 35% from a recent $35.07.
That slate includes The Odyssey, Toy Story 5, Spider-Man: Brand New Day, and Avengers: Doomsday, which are expected to be huge hits in 2026, while Benchmark analyst Mike Hickey noted that "management has highlighted that 2027 is already more than 50% booked." He added that the growing mix of movies specifically filmed for IMAX is a plus too. Hickey has a Buy rating on IMAX and a $42 price target, up 20%.
Shares of IMAX are trading at 22 times earnings estimates for 2026, in line with the broader market. But it may deserve a premium. Earnings are expected to rise 20% this year following an estimated 40% jump for 2025. And the growth story transcends the U.S. as foreign-language movies become an increasingly important part of IMAX's business, according to Seaport Research Partners analyst David Joyce. He notes that IMAX's box office for "local language" movies in 2025 hit a record, led by China's animated Ne Zha 2, and that at least 30% of IMAX's total box office this year will come from outside the U.S.
IMAX may not be saying goodbye to Hollywood, but the international push is another reason why IMAX should get rave reviews from investors -- regardless of whether Netflix or Paramount Skydance wins the bidding war for Warner Bros.
Write to Paul R. La Monica at paul.lamonica@barrons.com
To subscribe to Barron's, visit http://www.barrons.com/subscribe
(END) Dow Jones Newswires
January 16, 2026 21:30 ET (02:30 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments