Citi has reiterated its sell rating for AMC Entertainment Holdings Inc. and made adjustments to the stock’s price target. The new price target is set at $4.75, down from $15.50. The downgrade comes in response to recent developments within the company, including a stock split, APE conversion, and equity raise.
AMC recently completed an at-the-market equity offering, raising around $325.5 million. The purpose of this offering was to increase its cash reserves, address current liquidity concerns, and strengthen its balance sheet.
AMC has experienced significant activity in recent months. In August, the company underwent a 1-for-10 reverse stock split and completed the conversion of its AMC Preferred Equity units into common stock.
Analyst Jason Bazinet from Citi explains the rationale behind the adjusted price target, stating, “We are updating our model to reflect AMC’s stock split, the conversion of AMC Preferred Equity Units, and the recent equity raise. Following our update, our target price goes from $15.50 to $4.75. We maintain our Sell rating.”
Out of the seven analysts surveyed by FactSet, four have a hold rating for AMC, while three have a sell rating.
On Tuesday, shares of AMC fell by 2.5%, surpassing the S&P 500 index’s decline of 1.3%. In the past month, AMC’s stock has dropped by 27.2%, compared to the S&P 500’s decline of 4.8%.
Amidst this news, it is worth noting that shares of AMC experienced a 6.8% increase in Monday’s session. This rise was part of a trend that impacted multiple movie theater and streaming stocks due to the resolution of the Hollywood writers’ strike.
AMC CEO Optimistic as Hollywood Writers’ Strike Resolves
AMC CEO Adam Aron expressed his delight over the Writers Guild of America’s tentative agreement to end the strike, considering it a moment of celebration. Industry analysts have been closely monitoring the Hollywood writers’ strike, with B. Riley Securities analyst Eric Wold sounding the alarm that the strikes could potentially jeopardize AMC’s 2024 film lineup.
In an exciting development, AMC has recently announced the global release of the highly anticipated “Taylor Swift The Eras Tour” concert film in over 100 countries, starting on October 13th. Breaking records, the concert film has already generated a staggering $26 million in ticket sales on August 31st, setting a new single-day advance ticket sales record for AMC in the United States. The movie will be screened in all locations of AMC’s ODEON Cinemas subsidiary in Europe, as well as every AMC theater in the United States.
Related: Taylor Swift’s ‘Eras Tour’ Movie Sets Record for AMC
Wedbush, an analyst firm, made headlines last month by upgrading AMC from underperform to neutral. The decision was based on several factors, including a reverse stock split, the conversion of AMC Preferred units into common stock, and a favorable industry outlook.
Touting itself as the biggest movie-exhibition company in the United States and worldwide, AMC operates approximately 900 theaters and 10,000 screens across the globe.
AMC has experienced a turbulent journey over the past few years, transforming from a pandemic-stricken establishment to a meme-stock sensation. Capitalizing on the meteoric rise in its share price, AMC leveraged both equity and debt markets to secure a staggering $917 million in January 2021.
