AMC Entertainment (NYSE:AMC) stock was in the spotlight yesterday after GameStop (NYSE:GME) surprised the Street by reporting a fourth-quarter profit. The news sent many other meme stocks, including AMC, higher.

But a Citi analyst poured cold water on AMC yesterday, placing a $1.60 price target and a “sell” rating on the shares.

 The Bearish Note

Citi analyst Jason Bazinet yesterday launched coverage of AMC stock with a $1.60 price target and a “sell” rating.

According to Bazinet, AMC’s shares are “overvalued.” The movie-theater owner may have to sell more shares in the future to keep itself afloat, lowering the stock’s value.

Citi is also concerned about AMC’s high debt levels. The analyst warned that the firm would have to unload about 77% more shares to eliminate its debt.

TipRanks reports that “Bazinet is a 3-star analyst with an average return of 0.5% and a 56.94% success rate.”

Others Are Also Bearish on AMC Stock

Jim Chanos, well-known for his success when it comes to shorting stocks, has said in the past that he was selling AMC stock short.  The investor carried out an arbitrage play by shorting AMC’s common stock and buying its preferred stock, called AMC Preferred Equity (NYSE:APE). According to Chanos, the APE shares were trading at a higher valuation, even though it was “ultimately” the same as the common stock.

And InvestorPlace columnist Chris MacDonald earlier this month wrote that AMC “is weighed down by high-interest debt that it issued at unfavorable rates during the pandemic.” He included the name in his piece entitled “3 r/WallStreetBets Meme Stocks That Are NOT Worth the Gamble Right Now.”

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.