Shares of AMC Entertainment (NYSE: AMC) climbed more than 38% this week after the cinema chain operator announced the launch of several major titles that are expected to increase sales this year.
Fundamental analysis: Big loss announced; rebound expected
The coronavirus pandemic plagued the film industry in 2020, forcing AMC and competitors to raise new money to avoid bankruptcy. However, analysts expect AMC’s revenue to more than double in 2021.
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“All the discussion of the steps we have taken at AMC to strengthen our position will be our company’s real salvation due to vaccination,” said Adam Aron, CEO of AMC.
The movie theater company said the implementation of coronavirus security protocols in cinemas has encouraged more than 8 million moviegoers to return to cinemas in Q4.
AMC has said that a number of major film releases that have been delayed will hit theaters from May, including Godzilla vs. Kong, Top Gun: Maverick, Black Widow and F9 which is expected to increase sales significantly.
AMC has reopened the majority of theaters, with about 90% of its U.S. cinemas open from Friday. The theaters in Europe are expected to be re-launched in time for the new film releases.
Another analyst Richard Greenfield began covering AMC shares with a “Sell” rating and a price target of 1 cent.
“There is a significant gap between the future of total attendance at movie theaters and in turn the earnings of AMC in terms of current operating value and the overused capital structure,” the analyst said.
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Technical analysis: AMC share is worth $ 0.01, says analyst
AMC’s share price has more than doubled in the last twelve months, with the recent upswing, thanks to a group of Reddit investors who strengthened a handful of shares with AMC, GameStop and more in January.
The AMC share price rose about 8.5% on Friday to increase its total weekly profit to more than 38%. The price action stopped near $ 12.00 where the 200-DMA is located and this technical indicator will continue to resist. On the downside, the $ 9.50 horizontal line provides support if a downturn occurs.
Summary
The AMC share price rose this week after the cinema chain said that the vaccination of coronavirus vaccines and the upcoming release of several new titles will increase sales in 2021.