Why AMC Entertainment Stock Has Risen ~14% in 2018



Stock price uptrend

AMC Entertainment (AMC) stock had risen 13.9% YTD (year-to-date) as of April 27. Investors are upbeat about the stock, as the year promises to be a record-smasher for Hollywood. Analysts have projected revenue in 1Q18 (ended March 31) to rise 5.2% to $1.4 billion, driven by the success of Black Panther. Cinemark Holdings (CNK) had risen 12.2% YTD as of April 27.

In contrast, the S&P 500 has fallen 0.14%, impacted by lingering US-China trade war fears. According to MarketWatch, Goldman Sachs has warned that market uncertainty is likely to continue due to midterm elections in November.

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Could the stock uptrend continue?

AMC Entertainment is one of the largest US movie theater chains, along with Cinemark Holdings and Regal Entertainment.

Last year was a tough one for movie theaters, with underwhelming box office numbers, escalating ticket prices, and stiffening competition from streaming services such as Netflix (NFLX) and Amazon (AMZN).

Despite ticket costs rising and binge-watching catching on, AMC Entertainment is upbeat about 2018, as the box office is expected to have a record year with strong movie releases such as Avengers: Infinity War, Solo: A Star Wars Story, Deadpool, The Incredibles, and Jurassic World.

Disney’s (DIS) much-awaited Avengers: Infinity War, released on April 27, has smashed box office records. The movie earned $250 million in the US box office in its opening weekend, surpassing the $248 million earned by Star Wars: The Force Awakens during its opening weekend in 2015.

The company is also enhancing the movie-watching experience, adding recliners to its theaters and better food and beverage options. The company also expects its AMC Stubs loyalty program, which had 12.5 million members as of March 1, to be a growth driver.


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