AMC Entertainment (AMC) Cuts Dividend to Fund Buybacks, Macquarie Cuts PT to $14 but Sees Stability

Macquarie analyst Chad Beynon reiterated an Outperform rating while cutting the price target to $14.00 on AMC Entertainment (NYSE: AMC) after the company's Domestic 4Q Revs/EBITDA were +2%/+9% yoy. US attendance fell 4% vs -2% for the industry, but ATP grew 6%, the largest increase
going back several years. International Revs/EBITDA were +4%/-10%, as attendance grew 5% following the +9% in 3Q. Strong attendance, albeit easy comps, was offset by tough pricing in the quarter (ATP: -3%) but slightly offset by 5% CPP growth.

The analyst stated "AMC gave investors a lot to like through various announcements during earnings: 1) a cut to the dividend and shift to repurchasing shares 2) a reduction in the 2020 capex guide to $275-300m (from $300m) 3) new mgmt. compensation structure 4) progress in the cost cutting program. The dividend cut will save the company $72m a year and will go toward the new $200m repurchase program (24% of market cap) and debt reduction (~5.5x leverage)".

For an analyst ratings summary and ratings history on AMC Entertainment click here. For more ratings news on AMC Entertainment click here.

Shares of AMC Entertainment closed at $6.14 yesterday.

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