Imax (IMAX) is an "attractive" asset, and its most likely acquirers include private equity firms, Netflix (NFLX), Apple (AAPL), and Sony (SONY), Wedbush said in a Friday note.
Imax is exploring a sale and has approached entertainment companies as potential buyers, the Wall Street Journal reported Thursday.
At around $2 billion in enterprise value, Imax is trading below its standalone value and at a deeper discount as a potential acquisition target, the analysts said. They cited the company's well-known global brand, asset-light licensing model, and structurally expanding earnings profile.
Private equity would be interested in Imax's free cash flow generation, minimal capital expenditure requirements relative to revenue, and a clear path to operational optimization. Ownership of Imax would also avoid any platform-conflict issue, the analysts said.
Netflix ownership would not hamper rival studio access to the format as its content calendar is thin enough that purchasing Imax would not foreclose rival studio access to the format, according to the note.
Netflix and Apple would also benefit from Imax becoming a powerful tool to woo major filmmakers, according to the note.
Wedbush's rating on the company's stock is outperform with a price target of $46.
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