Cinemark (CNK) "unique" US and Latin American footprint and "modern" theatrical circuit make it well-positioned to continue growing its box office, Deutsche Bank said in a report Thursday.

The bank said the film industry is on its way to full recovery following five years of disruption from the COVID-19 pandemic and Hollywood talent strikes, which had weighed on both production and box office revenues.

After reaching about 80% of pre-pandemic levels in 2023, the recovery trajectory was interrupted by the strikes, which constrained the volume of films released through the first quarter of 2025.

However, Deutsche Bank said Q2 may have marked the start of a "second wave" of recovery, with domestic box office receipts roughly in line with an unencumbered 2023 slate despite fewer major studio releases. The firm expects the number of theatrical releases to improve in H2 and into 2026 as studios ramp production and new entrants expand distribution.

The normalization of film supply, combined with Cinemark's footprint and modern circuit, should drive top- and bottom-line growth for theatrical exhibitors, according to the note.

"The movie theater industry's recovery, paired with positive business fundamentals, should lead to double-digit [free cash flow] growth and attractive shareholder returns," Deutsche Bank said.

Deutsche Bank initiated coverage on the company with a buy rating and $36 price target.

Cinemark shares were up 2.3% in recent trading.

Price: 29.46, Change: +0.65, Percent Change: +2.27