AMC Entertainment Posts Wider-Than-Expected 1Q Loss, Revenue Disappoints

AMC Entertainment (AMC) reported a worse-than-feared loss in the first quarter. Total revenues also missed analysts’ expectations. However, shares of the largest US movie theater company gained more than 2% in the pre-market session on Friday.

AMC incurred an adjusted loss of $1.42 per share in 1Q, compared to the $1.30 loss per share estimated by analysts. The company reported a loss of $2.22 per share in the same quarter last year.

Total adjusted revenues generated in the quarter amounted to $147.4 million, versus the consensus estimate of $153.43 million. Additionally, revenues plunged 84.3% year-over-year and reflected an 88.8% fall in attendance due to the pandemic.

AMC CEO Adam Aron said, “Strengthening AMC’s liquidity position and balance sheet remains very high priorities, and we have been active across the board… Taken together, we have made well more than $4 billion of progress from our implementing a myriad of capital actions to help us make it through this global storm. As we look ahead to the remainder of 2021 and beyond, AMC remains focused on continued bold actions, in executing our strategies both operationally and financially, as we work to recover from the impact of COVID-19.” (See AMC Entertainment stock analysis on TipRanks)

On May 3, Wedbush analyst Alicia Reese maintained a Hold rating and a price target of $6.50 (27.8% downside potential) on the stock.

Reese said, “The company has sufficient liquidity to allow it to survive with low utilization through at least Q3, now that most of its highest earning theatres have re-opened. We think demand for theatrical content is high, and plenty of high-quality content is awaiting audiences.”

Meanwhile, the analyst expects “continued volatility in shares of AMC, as well as trading momentum unrelated to AMC’s fundamentals.” Therefore, “we do not recommend buying shares of AMC here,” she added.

The rest of the Street is sidelined on the stock with a Hold consensus rating based on 1 Buy, 3 Holds, and 2 Sells. The average analyst price target of $6.38 implies 29.1% downside potential to current levels.

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in AMC Entertainment is currently Neutral, as 2 hedge funds decreased their cumulative holdings of the stock by 13,800 shares in the last quarter.

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