AMC stock sinks to pre-‘meme stock’ levels as B. Riley slashes price target by 32%

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Shares of AMC Entertainment Holdings Inc extended their sell-off to a 17-month low on Wednesday, B. Riley analyst Eric Wold slashed his price target on the belief that post-pandemic box office recovery would be higher than previously forecast.

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“While consumer demand remains intact, in our opinion, the number of films released in theaters remains ~50% below pre-pandemic levels – which affects both film speed and the ability to capture trailers for upcoming films. influences,” Wold wrote in a note to customers.

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He now forecasts the 2022 box office to be ~30% below 2019 levels and the 2023 box office to be ~16% down, as compared to previous estimates at ~28% down and ~7% respectively.

“We now believe it may not be until 2024 before the domestic box office can again surpass $11 billion – as it did every year between 2015 and 2019,” Wold wrote.

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AMC’s AMC,
-4.41%
It fell 4.4% to $5.85 on Wednesday, its lowest level since May 7, 2021, just before the movie theater chain got caught up in the big “meme-stock” craze of spring 2021.

FactSet, Marketwatch

It has fallen 25.3% amid six days of losses, the longest such streak since the 11-day stretch that ended on January 27, 2020.

B. Riley’s Wold reiterated its neutral rating on AMC from May 2021, but lowered its stock price target from $11.00 to $7.50.

He lowered his third-quarter revenue estimate from $1.09 billion to $978 million, which compares with the current FactSet consensus of $1.01 billion, and dropped his 2022 estimate from $4.44 billion to $4.17 billion. Is.

AMC shares have fallen 39.0% over the past three months, while GME, a stock of videogame retailer and fellow “meme stock” GameStop Corp.
+0.36%
26.0% and the S&P 500 index SPX is down,
-0.33%
dropped 6.3%.

Meanwhile, AMC Preferred Equity Units APE,
-6.82%,
Known as the “APE,” it is down 6.8% to its all-time low of $1.64, and is down 40.1% over the past six sessions.

Wold said the weakness stems from a combination of concerns over management issuing shares and the sheer number of units that can be issued.

read also: APE sinks to new low after AMC unveils deal to sell shares worth up to $1.4 billion.

“While we would suspect the board [of directors] There is some floor where they will no longer issue units, we believe that the floor could be significantly lower, given the ability to de-lever the balance sheet and avoid equity dilution to avoid the fate of Cineworld which is expected to fall through 2020. Happening already before the end. ,” Wold wrote.

Cineworld Group Plc CNWGY

cine,
-6.18%
is a UK-based movie theater chain that filed for bankruptcy in September.

Separately, Wold has acquired Cinemark Holdings Inc. cut its stock price target on CNK,
-2.21%
IMAX Corp. $23 to $17 on IMAX,
-2.75%
National Cinemedia Inc. $25 to $20 on NCMI,
+6.18%
From $1.00 to 50 cents and at Marcus Corp. MCS,
-0.28%
From $22 to $28.

He rates National Cinemamedia at neutral, but buys ratings on Cinemark, IMAX and Marcus.

Credit: www.marketwatch.com /

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