AMC Stock Alert: The Analyst Upgrade Giving Popular Reddit Play AMC Entertainment a Pop Today

Shares of AMC Entertainment (NYSE:AMC) stock are rising on Monday morning following an analyst upgrade and boosted price target.

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B. Riley analyst Eric Wold says AMC stock is now a “buy” due to “an improving balance sheet outlook and as a strong opening weekend for ‘Godzilla vs. Kong’” that bodes well for movie theater demand. That said, he believes the solid turnout for the newly released film is related to resurging demand. And thus, boosted his rating to a “buy” from “neutral” and raised his price target to $13 per share.

“We have remained impressed with management’s ability to weather the pandemic headwinds by both strengthening the balance sheet and negotiating with landlords to improve the cash runway into 2022,” Wold wrote in a note to clients. “And as the largest exhibitor in North America that also operates the highest number of IMAX screens, we view AMC as well positioned to benefit from the industry’s projected resurgence and return to pre-pandemic attendance levels by 2023.”

Furthermore, according to Wold, only about 60% of movie theaters in North America are open right now. And the average capacity limit of those theaters ranges from 25% to 50%. However, Godzilla vs. Kong still brought in around $48.5 million in box office revenue during its first weekend.

“We believe consumers want to leave the house and return to the theater, and these results are very telling, especially considering that the movie was available for free to HBO Max subscribers at the same time as the theatrical release,” Wold wrote.

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AMC stock was up 11% as of Monday morning.

On the date of publication, Nick Clarkson did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Nick Clarkson is a web editor at InvestorPlace.

View more information: https://investorplace.com/2021/04/amc-stock-alert-the-analyst-upgrade-giving-popular-reddit-play-amc-entertainment-a-pop-today/

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