Loop Capital Reiterates Sell Rating on AMC Entertainment (AMC) Explaining Why The Share Price Will Eventually Fall

Loop Capital analyst Alan Gould reiterated a Sell rating and $1.00 price target on AMC Entertainment (NYSE: AMC) noting that shares have benefited from retail/Reddit demand, that has artificially elevated the price for the past few months.

The analyst stated "We have no idea how long this will last, but firmly believe that in the long run the fundamentals will win out. The fundamentals of the exhibition industry have declined, AMC’s competitive position, in our view, has not improved, its enterprise value has almost doubled while its closest competitor’s value has declined. The industry should bounce back, and the Godzilla vs. Kong results were encouraging, but we do not see the industry reaching pre-pandemic levels in the next few years. AMC’s average ATM sale price was $3.13 per share and we question why it hasn’t issued any more shares since late January. We also question what equity price is required to induce bondholders and landlords to accept equity for debt and deferred rent. Assuming its pre-pandemic value, which may be generous, implies little equity value barring successful financial engineering."

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 $10.05 yesterday.

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