Movie theater chain and popular “
meme stock”
AMC Entertainment (NYSE:AMC) slid a little over 6% in premarket trading today, but a recovery emerged in early trading, sending share prices up as much as 5%. This comes after losses posted yesterday that dealt the company its eighth loss in nine sessions and its fourth straight day of losses. This calamitous run comes as analysts recently notched up their opinion on AMC stock.
Retail Investors Still Showing Up for AMC Stock
While the recent numbers for AMC stock have been in a significant decline of late—just yesterday, the company lost around15%, and the last two weeks have seen a cumulative 41% loss—there are more than enough signs that retail investors are still interested and still putting cash behind their interest. Reports suggest that the social media phenomena are still driving interest in AMC, with Robinhood investors making AMC one of the largest holdings on the entire platform.
AMC's fundamentals, meanwhile, are a little less certain. While it's clear that the movies are coming back—a look at the slate of titles set for release this year makes that fairly clear—the issue right now seems to be more of supply than demand. With theaters open once more throughout the US, and opening weekends looking more like normal—the latest installment of the “Fast and the Furious” saga, known as “F9”, brought in $70 million in its opening weekend—the idea of a comeback in theaters isn't outlandish. There are signs of improvement; sales were down 84% over the last year at the theater, but net losses closed to $500 million. Looking for pre-pandemic levels to return will likely take some time and depend on no further government involvement, but there does seem to be an upward track.
AMC took several steps to protect itself during the worst of the pandemic and is continuing on from there. The company raised several hundreds of millions with debt and new stock issues, so its short-term outlook is fairly well protected. The notion of subscriptions in the MoviePass style has also been considered, reports note, dating as far back as last June, that would help provide stable income despite issues in the broader market.
How Do Financial Analysts Feel About AMC Stock?
The AMC stock forecast, based on our examination of financial analysts, is actually improving; the company currently has a “hold” consensus rating, which increased from its previous “sell” rating in the last month.
A year ago, AMC stock had two “buy” ratings, seven “hold” and five “sell.” Six months ago, that shifted to six “hold” ratings and four “sell.” Now, we're at three “hold” and three “sell.” While the complete lack of “buy” interest might distress some, both “sell” and “hold” interest is clearly departing the field as well.
AMC stock price targets, meanwhile, are in a very narrow range. The current consensus target is $5.20 per share, with a high of $16 and a low of $1. With AMC seen trading around $35 today, it's clear there is downside potential afoot.
The latest analyst moves for AMC stock have commonly not been positive, though some bright spots have emerged. While B. Riley and MKM partners both downgraded the stock this year—B. Riley from “buy” to “neutral” and MKM from “neutral” to “sell”—and both Loop Capital and UBS Group both have “sell” ratings on the stock, Wedbush doubled its price target on the company from $2.50 to $5.
Some less-formal analysis has also contributed; an exchange-traded fund driven by an artificial intelligence known as the Qraft AI-Enhanced US Large Cap Momentum ETF (NYSE:AMOM) has been seen loading up on shares of AMC in recent days. Perhaps more telling is that the fund unloaded several other stocks—including Facebook (NASDAQ:FB) and blue-chip Walmart (NYSE:WMT)—to do so.
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