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Citi reiterated its sell rating for AMC Entertainment Holdings Inc. Tuesday and cut the stock’s price target to $4.75 from $15.50, citing the company’s recent stock split, APE conversion and equity raise.
Earlier this month AMC
AMC,
announced the completion of its at-the-market equity offering, raising approximately $325.5 million. The movie-theater chain and meme-stock darling said that the equity offering boosts its cash reserves, addresses current liquidity concerns, and fortifies the balance sheet.
It has been an eventful few months for AMC. In August the AMC’s stock underwent a 1-for-10 reverse stock split and the company also completed the conversion of its AMC Preferred Equity units to common stock.
Related: Hollywood writers’ strike deal lifts movie theater and streaming stocks
“We are updating our model to reflect AMC’s 10-1 reverse stock split, the conversion AMC Preferred Equity Units (APE) to AMC common, and AMC’s recent equity raise,” wrote Citi analyst Jason Bazinet, in Tuesday’s note. “Following our update, our target price goes from $15.50 to $4.75. We maintain our Sell rating.”
Of seven analysts surveyed by FactSet, four have a hold rating and three have a sell rating for AMC.
Shares of the movie theater chain and meme stock darling fell 2.5% Tuesday, outpacing the S&P 500 index’s decline of 1.3%. AMC’s stock has fallen 27.2% in the last month, compared with the S&P 500’s decline of 4.8%.
Related: AMC equity offering is a ‘safety net’ and a chance to reduce debt balances, analyst says
Shares of AMC ended Monday’s session up 6.8%, one of a number of movie theater and streaming stocks lifted by the Hollywood writers’ strike deal.
AMC CEO Adam Aron described the Writers Guild of America’s tentative agreement to end the strike as a cause for celebration. Analysts have highlighted the possible impact of the Hollywood writers strikes on AMC, with B. Riley Securities analyst Eric Wold warning that the strikes could potentially put the 2024 film slate at risk.
On Tuesday AMC announced that it is bringing the eagerly-anticipated “Taylor Swift The Eras Tour” concert film to more than 100 countries, starting Oct.13. AMC recently announced that the concert film had shattered the company’s record for U.S. single-day advance ticket sales, with $26 million in ticket revenue sold on Aug. 31. The movie will hit every location of AMC’s ODEON Cinemas subsidiary in Europe and every AMC theater in the U.S. starting Oct. 13, the company said.
Related: Taylor Swift’s ‘Eras Tour’ movie is already setting records for AMC
Last month, analyst firm Wedbush upgraded AMC to neutral from underperform, citing the reverse stock split, conversion of AMC Preferred units into common stock and “an improving industry backdrop.
AMC describes itself as the largest movie-exhibition company in the U.S. and the world, with approximately 900 theaters and 10,000 screens across the globe.
The movie-theater chain has been on a roller-coaster ride over the past few years that took it from a beleaguered pandemic victim to a meme-stock phenomenon. AMC used the steep rise in its share price to tap into equity and debt markets, raising $917 million in January 2021
