AMC (NYSE:AMC) stock is trending on social media today ahead of its earnings, which the firm is slated to unveil on Nov. 8. AMC stock is advancing 5% in early trading even though investment bank Wedbush cut its price target on the shares to $11. That’s roughly where the name is trading at this point.
Wedbush Kept a “Hold” Rating on AMC Stock
In a note to investors today, Wedbush maintained a “hold” rating on the shares, citing valuation and what it sees as an equal risk-reward ratio. On the positive side, the bank expects AMC’s 22% market share to increase and believes that it can benefit from improvements to its theaters in Europe. Further, Wedbush is upbeat on the impact of Taylor Swift’s movie, The Eras Tour, on AMC.
The bank did not cite a reason for its price target cut. However, a court’s recent decision that enabled AMC “to convert its preferred shares into common stock” was widely seen as negatively impacting the value of the firm’s common stock.
AMC’s Q3 Results Could Boost Its Shares
Analysts’ mean estimate calls for the movie theater owner’s third-quarter sales to jump 27% versus the same period a year earlier to $1.2 billion. That would represent its highest quarterly revenue figure since 2019. However, analysts, on average, expect AMC to generate a per share loss of 27 cents.
Nevertheless, after AMC’s shares tumbled 76% in the last three months, even in-line Q3 results could cause the name to continue its recent rally. Specifically, the shares have advanced 9% in the last month and almost 40% between Sept. 8, when they bottomed, and Nov. 1, partly due to the success of Swift’s movie.
Despite the shares’ recent gains, they have a low Relative Strength score of 31.6, indicating that they are still “oversold,” according to The Street. As a result, if AMC reports results that are in line with or above analysts’ mean estimates, the shares could jump meaningfully
On the other hand, Investor’s Business Daily gives AMC stock an Accumulation/Distribution rating of B, suggesting that investors have been buying significant amounts of the stock.
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