What's Going On With AMC Entertainment Stock?

AMC Entertainment Holdings Inc AMC shares are trading lower. Wedbush slashed its price target on the stock to $4 on Thursday.

What To Know: Wedbush analyst Alicia Reese maintained AMC with a Neutral rating and cut the price target from $6 to $4. Interestingly enough, the analyst actually raised estimates for the first quarter, citing better box office trends.

In a new note to clients, Reese said she raised first-quarter revenue estimates from $786 million to $882 million, versus consensus estimates of $840 million. Domestic revenue estimates were increased from $580 million to $653 million and international estimates moved up from $206 million to $229 million.

“AMC expanded its market share in 2023 and can expand further from its 22.5% market share with its vast network of premium large-format screens and concert movie distribution,” the Wedbush analyst said.

“AMC also has an opportunity to drive revenue growth from its European circuit with theater upgrades that would boost per-screen averages, although it is unlikely to do so until it works through balance sheet right-sizing over the next two years.”

The company’s heavy debt load is overshadowing the positives, Reese said, adding that AMC raised more than $865 million in 2023, and opened the gates for “substantially more share issuance” in 2024 and beyond.

“We maintain our NEUTRAL rating and lower our price target to $4 from $6, based on a 7x EV-to-EBITDA multiple (unchanged) on our revised 2026 estimate. This is a premium to competitors as AMC has more potential for growth and upgrades in its international circuit; however, this is tempered by its inability to expand or upgrade with its debt load,” the analyst said.

AMC is expected to report earnings in early May, although a date has not yet been confirmed by the company. Analysts currently expect a loss of 82 cents per share on revenue of $839.602 million, according to estimates from Benzinga Pro.

See Also: Las Vegas Sands Analysts Cut Their Forecasts After Q1 Results

AMC Price Action: AMC shares are more than 99% below their all-time highs. The stock was down 1.5% at $2.93 at the time of publication, per Benzinga Pro.

Photo: Dave Dugdale from Flickr.