AMC ramps after broker upgrade
Wedbush slapped an “outperform” on shares, citing expected market share gains and a stronger release calendar.
Retail trader favorite AMC was up more than 7% in early trading after brokerage firm Wedbush Securities upgraded the stock to “outperform” from “hold” and raised its price target for the movie theater chain to $4 a share, implying a gain of more than 30%. Analysts ticked off a series of reasons for optimism:
“1) [AMC] is poised to benefit from a more consistent release slate over the next several quarters;
2) is positioned to gain market share in 2025 and 2026 with the most premium screens in North America and expansion plans in UK/EU;
3) repaid or postponed all debt that was due in 2026, relieving near-term uncertainty; and
4) is completing what we expect to be the last major share issuance for the foreseeable future, putting a significant headwind behind it.”
The fourth rationale seems especially important, since the mostly retail traders that piled into the stock — it was one of the OG meme stocks that emerged in the early 2021 GameStop brouhaha — have repeatedly pushed up the price only to have AMC bean counters, quite sensibly, issue new shares, which diluted the shareholder base and wiped out gains.
Again, issuing shares while your price is surging to unjustifiable levels is basic corporate logic. Not doing so would be leaving nearly free — or at least very cheap — money on the table.
But it’s a big part of the reason why AMC has been a pretty disastrous trade for holders of all but the shortest time horizons.
