Buy Imax and Apple Stock for a Happy New Year: Investment Firms Say They’re Underpriced

Wedbush Research has identified 16 securities among its best potential investments, and a quarter of them are in the entertainment business.
"Avatar: The Way of Water"
"Avatar: The Way of Water"

Keep your New Year’s resolution simple this year: Invest in Imax and Apple.

On Tuesday, Wedbush Research updated its “Best Ideas” list, the 16 publicly traded securities the investment firm believes are the most underpriced (of the companies they study) by the market. Among the selected stocks are Imax and Apple; the list represents roughly the top 10 percent of Wedbush’s highest-rated equities, analyst Michael Pachter told IndieWire. (Microsoft and Activision Blizzard, two other entertainment companiesthat are currently attempting to merge, also make the short list.)

Wedbush has a $20 price target on IMAX, which on Tuesday closed at $14.73 per share. The room for improvement has been echoed by several other analysts, including Wells Fargo, which has an IMAX price target of $21.

Apple, the world’s largest company by market cap, is still undervalued at $125.07 per share, Wedbush believes. They’ve assigned a $200 per-share target price on AAPL. Wells Fargo is also bullish on Apple with a target of $185.

Giant-movie-screen company Imaxhas been riding the “Avatar: The Way of Water” wave all the way to the bank. After its third weekend, the Disney film is already Imax’s fourth-biggest release of all time, behind the O.G. “Avatar,” “Star Wars: The Force Awakens,” and “Avengers: Endgame.” (“Avatar 2” is the biggest Imax release ever in 18 countries, including India, Germany, Thailand, South Korea, France, Turkey, Italy, Belgium, and Switzerland.)

In just 19 days, “Avatar: The Way of Water” reached $152.2 million in global Imax box office. ($55.3 million in the U.S.; $96.9 million international.) Overall, including the traditional movie-theater experience, the film has grossed $1.443.1 billion thus far. Director James Cameron set the (financial) success mark for the sequel to his 2009 blockbuster at $2 billion.

Major Imax releases in 2023 include “Ant-Man and the Wasp: Quantumania” (February 17), “Guardians of the Galaxy, Vol. 3″ (May 5),” and “Dune: Part Two” (November 3).

As for Apple, historically it’s been smart to bet on the iPhone maker — especially when it’s down. On Tuesday, the home to Apple TV+ and a forthcoming standalone MLS (Major League Soccer) streaming service dipped to per-share lows not seen since the first half of 2021. Today’s decline actually took Apple out of the $2 trillion club (current market cap: $1.99 trillion). That said, it was the only company in the $2 trillion club.

According to a Barron’s compilation of 41 ratings, the average AAPL target price is $172.42. Based on 11 estimates, IMAX, which is also a consensus “Buy,” has an average price target of $19.30.

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