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Why AMC Entertainment Stock Gained 13% Today

By Rich Duprey - Mar 9, 2021 at 4:17PM

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A raised price target may be spurring enthusiasm for the shares.

What happened

AMC Entertainment (AMC 2.95%) stock gained 13% on Tuesday, still riding the momentum from an analyst at Wedbush Securities doubling his price target to $5 per share yesterday.

So what

So-called "meme stocks" like AMC don't need much to get traders enthused enough to bid up the shares higher, and an analyst's seemingly bullish sentiment -- despite the fact the theater operator is already trading at twice the target level -- doesn't appear to be hurting it.

Empty theater with red curtain drawn across the stage

Image source: Getty Images.

Now what

While AMC Entertainment looks to have sufficient financing available to survive for the foreseeable future, the industry is still troubled. 

Disney released its animated film Raya and the Last Dragon last weekend, and despite it being shown in some 2,400 theaters, including AMC's cinemas, it only generated around $8 million over the weekend.

While it was also offered simultaneously as a pay-per-view offering on the Disney+ streaming service, the depressed showing was partially blamed on theater operator Cinemark apparently protesting the day-and-date release, as it refused to carry the movie in its theaters. Regal theater owner Cineworld is still closed until it gets assurances movie studios will release their big-budget films into theaters.

So even though AMC had the movie virtually to itself (other than the many independent operators still surviving), consumers chose not to come out en masse. Perhaps that informed the reason the Wedbush analyst kept his rating on AMC's stock neutral, despite the price target increase.

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