Please ensure Javascript is enabled for purposes of website accessibility

AMC Entertainment Could Go "Sharply Higher" as Analyst Hikes Price Target to $16

By Rich Duprey - May 14, 2021 at 12:52PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Events are finally starting to go the theater owner's way.

After a secondary stock offering netted AMC Entertainment Holdings (AMC -6.58%) some $428 million, one analyst thinks the theater operator's finances are increasingly solidifying and that could send its stock "sharply higher."

A confluence of events caused B. Riley analyst Eric Wold to raise his price target on AMC to $16 from $13 and reiterate his buy rating on the stock.

Moviegoers cheering

Image source: Getty Images.

The theater owner said yesterday it issued 43 million new class A shares at an average price of $9.94 per share, which would be sufficient to see it through the rest of the year. Back in January, AMC had been scrambling to cobble together $1 billion from lenders to stay afloat when it seemed likely it would declare bankruptcy, but it has been able to take advantage of a soaring stock price due to a massive short squeeze.

While it no longer appears on the brink and its finances look much improved, AMC is also benefiting from the U.S. Centers for Disease Control and Prevention saying people vaccinated against COVID-19 mostly don't have to wear masks anymore or socially distance in public.

Movie studios are also increasing their production of films, which should help make theaters a destination once more.

In a note to investors, Wold said the combination of better finances, additional agreements with studios on introducing films into theaters, and a global box office recovery bode well for AMC.

His price target suggests there is still 25% upside from where the stock closed yesterday, but more good news might just elevate it even further.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

AMC Entertainment Holdings, Inc. Stock Quote
AMC Entertainment Holdings, Inc.
AMC
$18.02 (-6.58%) $-1.27

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
397%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.