The Event Hospitality and Entertainment Ltd (ASX: EVT) share price has had a disappointing start to the week.
In early trade the provider of entertainment and accommodation services has seen its share price tumble almost 5% to $12.70.
What happened?
Today's decline appears to be related to a broker note out of Citi which placed sell ratings on the company and industry peer Village Roadshow Ltd (ASX: VRL).
According to the note, Citi has a sell rating and $11.30 price target on Event's shares and Village has a sell rating and $3.50 price target.
The broker has made this recommendation due largely to Australian box office figures being down 15% year-to-date.
While things are starting to improve, it still has concerns over industry-wide discounting and also the success of rival Hoyts' recliner strategy.
At certain cinemas Hoyts' seats now come with a powered recliner, boasting extra leg room, wider seating, and extra comfort. Citi fears both companies could be losing market share to Hoyts as a result of the strategy.
Should you sell?
Whilst I am a fan of Event, its performance has been reasonably inconsistent and FY 2017 was a big disappointment.
But if were a long-term holder of its shares I wouldn't be in a rush to sell. Its generous dividend and undemanding valuation make it a hold for me.
Village, on the other hand, would be a sell for me. Its performance has been even more inconsistent over the last few years and shows little sign of improving in the near future.
Citi isn't alone in thinking that Village is a sell. A note out of Macquarie last month revealed that its analysts had downgraded its to an underperform rating with a $3.50 price target.
