AMC Stock Price Prediction

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Contributor, Benzinga
October 11, 2022
$4.60
0.15[3.37%]
Last update: 1:00PM (Delayed 15-Minutes)
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Open4.490Close-
Vol / Avg.8.441M / 16.283MMkt Cap1.141B
Day Range4.485 - 4.72052 Wk Range3.585 - 85.300

If you have even remotely been watching the stock market in the past year and a half, you would have noticed AMC Entertainment (NYSE: AMC). The company’s shares had a mammoth rally in May of this year after it became a so-called “meme stock” following numerous posts on the Reddit Wall Street Bets (WSB) forum. As a result, many people are looking for an AMC stock price prediction.

Since that rise in late May or early June of 2021, where the stock reached an intraday high of $72.62, it has given up under half of those gains but has remained relatively resilient, trading well above the $12 area it broke out from. As a result, Reddit traders and meme stock enthusiasts will be hoping to see another explosive move higher.

As AMC moved into 2022, fears of a recession took over, with Americans cutting back on their discretionary spending. The war in Ukraine put a damper on the economy, and soaring gas prices in the spring and summer of 2022 made it even more difficult for Americans to hold onto their hard-earned money. Yes, AMC was able to collect quite a lot of cash during the pandemic, but that money’s been spent on—less than stellar investments.

In March 2023, an APE conversion was taken to court, causing the stock to tumble once more. Only time will tell if the stock can recover its value or even maintain some semblance of what made it a popular meme stock in the first place.

AMC Stock Market Position

AMC’s current market capitalization is at $3.14 billion, which is down from highs earlier this year. Focusing on market capitalization rather than the actual stock price is important, especially for investors, as you cannot value a company by share price alone. The market cap reflects a company’s perceived value.

There have been various points made on both sides of the bull and bear case. AMC Entertainment is the largest movie theater chain in the world, but even pre-pandemic, demand was beginning to fall due to the growth of Netflix (NASDAQ: NFLX) and other streaming services. However, demand spiked as economies and movie theaters have reopened, with the company reporting a new post-reopening attendance record in early October.

Whether that demand will continue or fall off over the next few months is key, but it does provide positives for AMC at a time when it is trying to capitalize on its meme stock status. For example, AMC now accepts cryptos such as Bitcoin (BTC) and Dogecoin (DOGE), while it also recently hinted at a partnership with fellow meme stock GameStop (NYSE: GME). 

Can these moves help in its recovery? Well, that is questionable, but it will need to find a way to drive demand once more in the face of a potential long-term fall.

Looking at an AMC competitor, Cinemark (NYSE: CNK), we can see it is valued a lot lower than AMC. However, it has only around 500 theaters compared to AMC’s more than 900. 

Analysts’ Bull Case for AMC Stock

Understandably, given the skepticism surrounding the surge in AMC’s stock price, few analysts presented a bull case for the stock in recent months. 

On August 19, 2021, 1 analyst raised AMC’s price target back. However, he is not exactly a bull. Following AMC’s second-quarter results, Citigroup (NYSE: C) analyst Jason Bazinet raised the firm’s price target on AMC to $5 from $3.70. However, Bazinet kept a Sell rating on the shares, believing that they remain overvalued at current levels. 

Bazinet has tons of experience, working at Citi for over 17 years. According to stock analyst ranking website TipRanks, Bazinet's ratings have provided an average return of 4.5% since 2009, and he has a 64% success rate. 

The only other previous upgrade found for AMC stock was on June 4 by Wedbush analyst Michael Pachter, who raised the price target on AMC shares to $7.50 from $6.50, keeping a Neutral rating. Pachter said he was increasingly optimistic about the industry. The post-pandemic environment and signs of returning demand were encouraging for the upcoming summer and holiday periods. 

Pachter has been proved somewhat correct. Despite the price target being significantly lower than AMC’s current share price, the pent-up demand has caused a surge in AMC customers following the pandemic.

One other slightly positive note came from JPMorgan (NYSE: JPM) analyst Alexia Quadrani, who said that movie executives now see 10% of the 44,000 domestic screens closing permanently, down from the original 15% estimated.

Macquarie Analyst’s Bear Case for AMC Stock

Traders will find no shortage of bear cases and downgrades for AMC shares, the latest coming from Macquarie (OTCMKTS: MQBKY) analyst Chad Beynon, who is also its managing director. He has been at the company for over 14 years and is an analyst for gaming, lodging and theater stocks. 

Beynon downgraded AMC from Neutral to Underperform on September 1, stating that he is concerned with the number of mid-tier release movies. The analyst reduced his second-half 2022 and 2023 domestic box office estimates, which impacted his revenue calculations. 

Elsewhere, MKM Partners analyst Eric Handler kept his Sell rating and $1 price target on AMC on August 24. While Handler noted the company’s lower cash burn and improved liquidity were positives, he said a slow box office recovery would likely make breakeven cash flow unlikely in 2021. 

Going into 2022, the theater chain had quite a lot of promise, but it couldn’t hold as most analysts recommended selling the stock. Going into 2023, a stock conversion that could have been beneficial has gone to court, souring public sentiment on the stock.

AMC Stock Price History

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Screenshot taken from Benzinga Pro on 3/15/2023

Looking at the technicals for AMC on the daily chart, it is apparent that the relative strength index (RSI) is not in either bull or bear territory and hasn’t been since June. It recently dipped below the key 5-day moving average but has not seen any real momentum to the downside, demonstrating that resilience mentioned earlier. So, based purely on price, AMC’s shares don’t give a strong signal for either direction at the moment. 

Fundamentally, AMC isn’t 1 of the best stocks to buy right now, but it has seen improvements of late. The reopening and strong entertainment demand have helped, alongside its slower cash burn. There is also the potential for the new James Bond movie to be a box office hit after it smashed U.K. box office records, grossing more on its opening weekend than any other James Bond franchise film. 

Whether AMC stock has enough positive factors to move higher is another question. It certainly has a lot of headwinds to contend with.

Where to Buy AMC Stock

If you want to buy AMC shares, you will need a broker. Finding the broker that suits your trading or investing needs can be challenging, but luckily, below, you can view several of the best brokers to buy AMC shares with. 

How Long Will it Take for AMC Stock to Reach $50?

Of course, this pricing guess is pure speculation. AMC’s stock price may never reach the $50 level again, but it’s worth taking an educated guess.

What AMC needs is another driver: a real reason for retail investors to get behind the stock once more. The initial momentum is over, and the company is trying hard to get meme stock investors back on board after it floated a potential GameStop partnership and allowed customers to pay in cryptocurrency. 

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The next opportunity for a big move is probably the company’s third-quarter earnings, which are expected to be released in early November. However, a significant rise in consumers and revenue would need to materialize to attract enough momentum for its shares to surge once more.

A few more blockbuster movies exclusively in theaters over the coming months would also be a catalyst.

Has the Momentum Faded?

AMC shares are lacking direction and momentum at the moment, and analysts make a compelling bear case. The original move was seen as WSB versus Wall Street, which WSB clearly won. Nevertheless, with 2 completely opposing views on the stock, it is probably best to watch from the sidelines for now. 

Frequently Asked Questions

Q

Is AMC stock a good investment?

A

It depends on the side you listen to. But if it is an analyst’s predictions you are interested in, then the answer is no, with numerous having price targets below $10 and believing the shares are overvalued. 

Q

What's the hightest AMC stock has ever been?

A

The highest AMC stock has ever  been was when it hit $62.49. That happened on June 2, 2021.

 

 

Q

How many AMC shares exist?

A

As of August 2022, there are 516.82 million outstanding AMC shares.

 

About Sam Boughedda, Stock Market Analyst

He is an expert in the following spaces: stock market news writing, analysis, and research.