Chad Beynon, a Macquarie analyst, along with his team, restated their $6 price goal (the cost of one AMC ticket is around $14) and Neutral score for AMC on Thursday.
While the group applauded the company’s CEO for embracing the enthusiastic trading and voiced optimism on a box office return, the team of analysts were still concerned about AMC’s balance sheet.
“Despite shares being higher by 2,850% ytd compared to the S&P 500’s 12%, the company’s balance sheet is still weighted down by almost $5.5 billion in debt as of the first quarter of this year and our estimated leverage is 12.3x by the end of 2022. AMC should benefit from the return of theater demand, which is greatly needed for the company to deal with deferred rent ($450 million+) and high interest (~$420 million),” said the analysts in a note.
The team believes AMC will lose almost $2.5 billion between 2021 and 2023. But, the note continued on to say those estimates are “under review.”
AMC fell 31% on Thursday after an almost 100% increase on Wednesday after renewed interest for meme stocks. The pullback comes after a disclosure by the company that it will give 11.5 million new shares — as the CEO aims to capitalize on the stock’s increase — to raise funds for various corporate plans.
Author: Steven Sinclaire