Patience is our only friend, and in the End...........
AMC Stock Is Up. There's Pent-Up Demand for Moviegoing. -- Barrons.com
1:58 pm ET May 14, 2021 (Dow Jones) Print
By Connor Smith
Shares of AMC Entertainment Holdings continued their recent run on Friday after an analyst at B. Riley Securities upped his price target on the movie theater stock.
B. Riley analyst Eric Wold reiterated a Buy rating for AMC stock (ticker: AMC) and raised his price target to $16 from $13 in a note on Friday. AMC shares, which rose nearly 24% on Thursday, were up another 4.2% to $13.30 in Friday afternoon trading.
The company said Thursday it raised $428 million from selling 43 million shares through an at-the-market stock sell program that was launched on April 29. Wold wrote that the equity program brings the total amount the company has raised since September to nearly $1.3 billion.
"With the average price of this latest raise being roughly 3.4x the average for all the other equity raises, we are positive on the decision to take advantage of the recent stock price to potentially bring further strategic moves around the balance sheet into play," Wold wrote.
The company's shares exploded in January after retail traders posting in online forums made headlines by betting on highly shorted stocks like GameStop. AMC has been among the more popular names on Reddit's WallStreetBets forum. Such new investors garnered a shoutout from AMC CEO Adam Aron during last week's earnings call.
Wold argued that after the latest raise, liquidity shouldn't be a conern in the near-term. He points to pent-up demand for moviegoing, a strong blockbuster-filled film slate, and updated distribution agreements with studios will all benefit the company's U.S. operations. He thinks industrywide attendance can return to pre-pandemic levels by 2023.
Write to Connor Smith at connor.smith@barrons.com
