Analyst: Consensus Is Too High On AMC Entertainment

AMC Entertainment Holdings Inc AMC is likely to miss fourth-quarter expectations when it posts results next Tuesday, according to an analyst. Box-office receipts fell 4.4 percent in the recent period, he noted.

But with receipts up more than 7 percent in the current quarter to date, the analyst, Wedbush's Michael Pachter, raised his target on AMC by 10 percent on Thursday to $33. He maintained an Outperform rating.

Shares of the Leawood, Kansas-based company are up nearly 18 percent since November, and changed hands recently at $30.48, up $0.19.

Among the eight analysts following AMC, six maintain Buy ratings while two rate the shares at Hold, according to FactSet.

Pachter forecasts that first-quarter box-office receipts will grow 5 percent "given strong potential for upcoming releases," including Fifty Shades of Grey and Cinderella.

Yet, the analyst shaved more than 13 percent from his 2015 earnings estimate, to $1.17, saying he's boosted estimated revenue per screen, but factored in "the lower base" in the fourth quarter.

For the fourth quarter ended December 31, Pachter expects earnings of $0.15 a share on revenue of $693 million, versus the Street consensus of $0.24 a share, on revenue of $726 million.

Despite poor attendance, Pachter said average ticket prices rose 2 percent in the fourth quarter, supported by the company's ongoing theater renovation program.

In the period ended September 30, admissions revenue fell more than 10 percent to $417.5 million, while food and beverage revenue dropped 6 percent to $189.1 million.

As of September 30, Dalian Wanda Group Co. of China held a 77.86 percent stake in AMC and controlled more than 91 percent of voting power.

The real estate investment trust EPR Properties EPR, launched by AMC in 1997, derived about $65.5 million, or 23 of its total revenue, from properties leased to AMC in the nine months ended September 30.

For the same period, AMC paid out $341 million for renting real estate.