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AMC stock is 'overvalued' and could crash 85% says Citi after cutting price target

November 25, 2022 9:30 AM EST
Get Alerts AMC Hot Sheet
Price: $6.14 -9.71%

Rating Summary:
    3 Buy, 8 Hold, 8 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 6 | Down: 18 | New: 26
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Shares of AMC Entertainment (NYSE: AMC) are vastly overvalued, according to Citi analyst Jason Bazinet.

The analyst reiterated a Sell rating and cut the price target to $1.10 per share to reflect updated estimates. Bazinet sees an 85% downside risk for the Sell-rated AMC stock based on the updated price target.

“We maintain our Sell rating, as we believe that the shares are overvalued at prevailing levels,” Bazinet said in a client note.

The analyst made the latest updates to Citi’s model to reflect Q3 performance and their latest outlook for the AMC stock.

Earlier this month, AMC said its revenue rose 27% to nearly $1 billion, although net loss widened to $226.9 million. Both top and bottom line results came in better than expected.

The management also noted that they expect to see a continued recovery in the U.S. box office, which should result in a 15-25% growth in 2023. Still, Bazinet’s base-case scenario is more skeptical about the U.S. box office growth.

“Given the proliferation of multiple streaming services over the last several years, we see downside risk to the global box office going forward. In addition, these recent industry developments suggest that the strategic role of exhibitors may be diminishing,” Bazinet added in a note.

As of 09:25 EST (14:25 GMT), AMC stock is up about 1% in pre-market Friday.

By Senad Karaahmetovic



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Citi, Senad Karaahmetovic