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Investing.com -- AMC Entertainment (NYSE:AMC) stock surged 10% Friday after Wedbush analyst Michael Pachter upgraded the former meme stock from Neutral to Outperform, raising his price target to $4.00 from $3.00.
The upgrade comes as Pachter sees multiple catalysts for the movie theater chain, including benefits from a more consistent film release schedule in upcoming quarters and potential market share gains in 2025 and 2026. The analyst highlighted AMC’s premium screen advantage in North America and expansion plans in the UK and EU markets.
Pachter also noted that AMC has addressed its near-term debt concerns by repaying or postponing all debt due in 2026 and is completing what he expects to be "the last major share issuance for the foreseeable future."
The company plans to close underperforming theaters while investing in its most productive locations, with revenue per screen already trending 3% higher than 2019 levels before additional investments. With box office performance expected to stabilize, Pachter anticipates AMC’s EBITDA will cover interest expenses, eliminating the need for further share issuances.
Wedbush applied an 8x EV-to-EBITDA multiple to AMC, in line with historical norms during periods with solid box office schedules. While not projecting substantial growth, Pachter expects mid-to-high single-digit growth in box office revenue over the next few years, followed by lower growth rates thereafter.
AMC shares closed Thursday at $3.01 before Friday’s rally.
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