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Wall Street Bullish on AMC Entertainment

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Dec. 27 2018, Updated 7:30 a.m. ET

Most analysts recommend “buy”

Of the 13 analysts covering AMC Entertainment (AMC) stock, 62.0% recommend “buy,” and 38% recommend “hold.” The stock’s target price hasn’t been revised in the last 15 days. Analysts’ average 12-month average target price of $21.63 for AMC implies a 66.6% upside to its December 20 price.

Of the 13 analysts covering Cinemark Holdings (CNK), 69.0% recommend “buy,” and 29.0% recommend “hold.” Their average 12-month target price of $44 for CNK implies a 19.8% upside to its December 20 price.

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What lies ahead for AMC Entertainment?

This year has been strong for AMC at the box office, with Black PantherAvengers: Infinity WarJurassic World: Fallen KingdomDeadpool 2, and Incredibles 2. In the holiday quarter, The Grinch, Ralph Breaks the Internet, Spider-Man: Into the Spider-Verse, and Aquaman should boost AMC’s top line.

AMC’s revamped theaters and better food and beverage options should also add to its revenue growth. The company has tied up with Groupon, Fandango, and Atom Tickets for distribution, and its Stub A-list is boosting its loyalty membership. However, AMC needs to be watchful, as several theater-chains are now offering various subscription services. Additionally, AMC’s expenses are rising due to ongoing investments such as the addition of recliners and large-format screens and higher food, beverage, and film exhibition costs. The company is trying to cap expenses by reducing its overhead costs and operating hours.

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