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AMC Entertainment Stock Rises after Reopening Announcement


Sep. 4 2020, Updated 6:53 a.m. ET

AMC Entertainment (NYSE:AMC) stock rose in today’s pre-market trading session. The stock rose around 8.7% in today’s trading session at 7:19 AM ET. The stock rose after the company announced that it plans to reopen all of its movie theaters by the end of July. The movie theater chain closed its locations earlier this year amid the coronavirus outbreak.

According to a report from Variety, AMC Entertainment “is expected to resume operations in 450 of those locations on July 15 and expects to be almost fully operational by the time that Disney’s ‘Mulan’ debuts on July 24 and Warner Bros.’ ‘Tenet’ bows on July 31.” The report also said, “As part of that process, AMC is reducing its seating capacity in order to help people social distance, it is implementing new cleaning procedures, placing hand-sanitizing stations throughout its theaters and encouraging contact-less and cash-free concessions.” AMC Theatres said that guests won’t be required to wear face masks when its theaters reopen next month.

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Growth projections for AMC Entertainment

In the first quarter, AMC Entertainment reported an adjusted EPS of -$3.11 compared to -$1.25 in the first quarter of 2019. The earnings missed analysts’ consensus estimate of -$1.52 per share. AMC Entertainment generated sales of $941.5 million—a reduction of 21.5% from the first quarter of 2019. The company missed analysts’ consensus sales estimate of $951.4 million.

Wall Street analysts expect AMC Entertainment to post sales of $46.5 million in the second quarter. The figure would mark a fall of 96.9% YoY (year-over-year) compared to $1.5 billion in the second quarter of 2019. Also, analysts expect the company to post an adjusted EPS of -$4.03 in the second quarter. Currently, analysts expect -52.5% and 82.2% growth in the company’s 2020 and 2021 sales, respectively. Meanwhile, they expect an adjusted EPS of -$11.36 and -$3.35 in 2020 and 2021, respectively.

Analysts’ recommendations and target price

Among the 12 analysts following AMC Entertainment stock, one recommends a “strong sell,” two recommend a “sell,” and nine recommend a “hold.” None of the analysts recommend a “buy.” Wall Street analysts have a 12-month target price of $4.33 for AMC Entertainment stock. Overall, the target price implies a downside potential of 23.1% compared to the stock’s closing price of $5.63 on Thursday. The consensus target price for the stock has risen from $3.20 in May—a growth of 35.3%.

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Stock returns

On Thursday, AMC Entertainment stock rose 3.9% and closed at $5.63 with a market cap of $587.3 million. The stock price has risen 8.9% in the trailing five-day period, while it has fallen 22.2% year-to-date. AMC Entertainment stock has fallen this year. Movie theaters closed amid the COVID-19 outbreak.

Currently, AMC Entertainment stock is trading 54.9% below its 52-week high of $12.49 on August 8, 2019. The stock is also trading 188.7% above its 52-week low of $1.95 on April 13, 2020.

On Thursday, AMC stock was trading 2.4% above its 20-day moving average of $5.50. Meanwhile, the stock is trading 25.4% above its 50-day moving average of $4.49 and 18.0% above its 100-day moving average of $4.77. AMC Entertainment stock’s 14-day relative strength index score of 54 indicates that it isn’t overbought or oversold.

To learn more, read AMC Entertainment Rose 50% on Amazon Buyout Talks.


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