Stocks & Forex
AMC’s ‘road to recovery getting better,’ says Macquarie
By James Rogers
AMC Entertainment is continuing its post-pandemic recovery, according to Macquarie Research
AMC Entertainment Holdings Inc. is continuing its post-pandemic recovery, according to Macquarie Research.
The movie-theater chain and sometime meme-stock darling reported better-than-expected first-quarter revenue and adjusted earnings Friday, and CEO Adam Aron is confident that the company will benefit from the slate of movies coming in 2023.
Over the weekend, AMC (AMC) also said it has reached an agreement to settle a shareholder lawsuit over the conversion of AMC Preferred Equity units into common stock.
Related: AMC stock falls, APEs rise on stock conversion agreement
AMC’s stock ended Monday’s session up 0.2%. The company’s APE units ended up 0.64%.
“Road to recovery getting better with box-office strength,” said Macquarie Research analyst Chad Beynon, in a note released Monday. Macquarie expects that in 2023, domestic industry box office revenues will reach $8.7 billion, a 19% year-over-year increase, but down 23% from 2019, before the pandemic hit. “Overall, AMC is highly optimistic about film volumes recovering to pre-pandemic levels over the next few years, supported by growing theatrical aspirations from the likes of Amazon and Apple,” said Beynon. “We expect AMC’s business to grow with the market and benefit from strong flow-through given significant fixed costs in the business.”
The analyst firm also pointed to concession spending at AMC, with first-quarter food and beverage spending per person hitting an all-time high of $7.99, a 50% increase over 2019. Macquarie has an underperform rating for AMC.
Related: AMC eyes Hollywood box-office boost this year after first-quarter revenue beat
Other analysts highlighted the box-office rebound benefiting AMC.
“Q1 results ride industry tide higher,” wrote Wedbush analyst Alicia Reese, in a note released Monday. “Theatrical exhibition is on the path to normalization, with an improving release slate in 2023.” Wedbush also has an underperform rating for AMC.
Of eight analysts surveyed by FactSet, three have a hold rating and five have a sell rating for AMC.
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