Investing.com -- Roth MKM upgraded AMC Entertainment Holdings Inc (NYSE:AMC) to "Neutral" from "Sell" given an improving box office cycle and a stabilizing financial position that could help the cinema chain’s shares find a bottom.
The brokerage said the box office is entering a positive multi-year content cycle, and AMC’s cash flow should turn positive in 2025 for the first time since 2019. While high debt levels and ongoing cash burn remain concerns, AMC has raised about $180 million from equity sales in the first quarter, bolstering liquidity.
Roth lowered its price target to $3.25 from $4, noting that AMC trades at around 8.5 times its estimated 2025 adjusted EBITDA, at the higher end of historical industry ranges. The firm also trimmed fourth-quarter revenue and earnings estimates, citing shifting audience trends and a weaker holiday slate compared to last year’s Taylor Swift: The Eras Tour boost.
AMC’s stock has been volatile in recent years, fuelled by its retail investor base. Roth noted that while further equity raises may be limited in the near term, changes in Delaware corporate law could make it easier for the company to increase its authorized share count in the future.