AMC Entertainment (NYSE:AMC) stock is in the green today despite a price target reduction from Macquarie. This morning, the investment firm lowered its price target to $4 from $5 while maintaining an “underperform” rating. AMC reported its fourth-quarter earnings earlier this week with revenue of $1.1 billion, beating the analyst estimate for $1.05 billion.
Macquarie acknowledged the success of the Taylor Swift and Beyoncé movies during Q4 amid a healthy spend per patron figure.
“These two movies added greatly to movie theatre ticket sales across our entire industry, as just these two films represented fully one ninth of the complete fourth quarter domestic industry-wide box office,” said CEO Adam Aron.
For the year ended Dec. 31, consolidated attendance reached 239.48 million compared to 200.96 million a year ago. In addition, consolidated food and beverage revenues per patron was $6.97, compared to $6.54 a year ago.
AMC Stock: Macquarie Lowers Price Target to $4
At the same time, AMC’s revenue has yet to recover to its pre-pandemic high. In addition, the lingering effects of the 2023 Hollywood strikes have weakened the 2024 box office, which Macquarie took into account when lowering its price target.
Macquarie previously lowered its price target to $5 from $8 on Jan. 29, cautioning that it wanted to see margin improvements. During Q4, adjusted net income margin improved to -10.74% from -15.43% a year ago. Adjusted EBIT margin improved to -13.61% from -22.65%.
Furthermore, the firm noted that AMC could have potential upside during the second half of 2024. AMC stock is up by nearly 5% since Jan. 29.
On Feb. 29, B. Riley analyst Eric Wold lowered his price target to $8 from $12 while maintaining a “neutral” rating. With a target still way above the current price, Wold believes that the box office could see a significant rebound in 2025. The analyst also added that he sees a path that would involve AMC’s management addressing its 2024 debt maturities in an efficient manner.
AMC stock carries an average price target of $5.42 among analysts with coverage. The highest target is $8 while the lowest target is $4.
On the date of publication, Eddie Pan did not hold (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.
