AMC The Best Is Yet To Come. Wall Street Remains Skeptical - www.malkamdior.com
The shares fell more than 9% on Tuesday after Citigroup analyst
There has been a lot of good news for AMC (ticker: AMC) and other theater operators, lately. Business restrictions are loosening across the
Movies delayed for release last year are lined up to make their debut in theaters in the coming months, hopefully luring audiences despite occupancy limits.
AMC beat expectations for the fourth quarter, and CEO
And AMC has been able to sell shares and debt to raise more than
"AMC has taken numerous actions to improve its financial position." Goss wrote in a note this week. "However, significant uncertainty remains for the company."
Some investors are buying seemingly impervious to such warnings. AMC shares have been a favorite of the so-called meme stock retail trading crowd. Some of these investors will be eligible for the
A spokesman for AMC did not respond to requests for comment.
The movie-theater chain has whipsawed over the last few weeks, with its stock at times up double-digit percentages on optimism over the economic reopening, and down an equal amount on fears that the reopening isn't happening fast enough.
Case in point: AMC soared 25% on Monday, when the company said it was opening two big cineplexes in
Shares of AMC are up 415% since last year, compared with the 57% one-year gain in the S&P 500.
Analysts have pointed to the company's
"We see the company's elevated leverage as an added risk to an uncertain recovery," Citi's Bazinet said in a note on Tuesday. "And, we see recent industry developments indicating that the strategic role of exhibitors is diminishing."
Several analysts have set low price targets for the stock. Credit Suisse has a
The most aggressive call yet came last week from
But it remains to be seen whether consumer preferences for at-home entertainment can be overcome after a year of pandemic-induced lockdowns. Studio executives have said they are committed to the streaming model, Greenfield notes. And consumers have embraced it.
"As consumers return to theaters (beyond an initial burst of excitement to see anything and everything out of the home), we believe they are likely to be far more selective in what they pay to see in a theater," Greenfield said.