Shares of AMC Entertainment (NYSE: AMC) were up more than 38% this week after the operator of the cinema chain announced the launch of several major titles that are expected to boost sales this year.
Fundamental analysis: Big loss announced; expected recovery
The coronavirus pandemic hit the film industry in 2020 and forced AMC and rivals to raise new money to avoid bankruptcy. However, analysts expect AMC’s revenue to more than double by 2021.
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“Despite all the talk about the steps we have taken at AMC to reinforce our position, the real salvation for our company will be due to vaccination,” said AMC CEO Adam Aron.
The film company said the implementation of coronavirus security protocols in cinemas encouraged more than 8 million viewers to return to cinemas in the fourth quarter.
AMC said a series of major movie releases that were postponed would hit theaters starting in May, including “Godzilla vs. Kong “,” Top Gun: Maverick “,” Black Widow “and” F9 “, with the expectation of significantly increasing sales.
AMC has reopened most cinemas, with about 90% of its cinemas in the United States opening on Friday. Theaters in Europe are expected to be back up and running in time for new movie releases.
Still, analyst Richard Greenfield started to cover AMC’s shares with a “Sell” rating and a target price of 1 cent.
“There is a substantial disconnect between the future of frequency added to the cinema and, in turn, AMC’s profit power in relation to its current business value and over-balanced capital structure,” said the analyst.
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Technical analysis: AMC shares are worth $ 0.01, says analyst
AMC’s shares have more than doubled in price in the past 12 months, with the recent rise coming thanks to a group of Reddit investors who collaborated to boost a handful of shares in January, including AMC, GameStop and more.
AMC’s share price rose about 8.5% on Friday to increase total weekly earnings to more than 38%. The price action stopped close to $ 12.00, where the 200-DMA is located and this technical indicator will continue to offer resistance. On the negative side, the $ 9.50 horizontal line will provide support in the event of a retraction.
Summary
AMC’s stock price soared this week after the cinema chain said coronavirus vaccine launches and the launch of several new titles are expected to boost sales in 2021.