February 24, 2024
London, UK

AMC Stock under Pressure After Price Target Cut

AMC News

AMC Entertainment Holdings Inc (AMC) stock closed the trading session 4.41% lower at $5.85 after B. Riley Securities reiterated AMC at “Neutral” but cut the price target for the stock from $11 to $7.50.

In a press release earlier today Odeon Finco an AMC subsidiary announced a $400 million private offering of senior secured notes due 2027. Odeon Finco which makes the offering is a direct subsidiary of the Odeon Cinemas and indirect subsidiary of the AMC Entertainment. Odeon Finco will use the funds from the secured notes offering for repayment in full of Odeon Cinemas Group’s existing loan facilities, to pay related fees, costs and expenses.

AMC reported for the second quarter a net loss of $121 million. The loss was at -$0.24 per share up from -$0.52 per share the previous quarter. Attendance in U.S theaters was 43 million above the 25.7 million in the previous quarter.

AMC’s debt load is $5 billion, almost $2 billion more than its market capitalization of $3.19 billion.

Among the top owners of AMC are The Vanguard Group, Inc. with a 9.01% stake, BlackRock Fund Advisors with 3.59%, SSgA Funds Management, Inc. with 1.99% and Geode Capital Management LLC with a 1.30% stake.

AMC Technical Analysis

AMC’s technical picture is clearly bearish as the price breached the lower right peak shoulder of the head and shoulders formation, pointing to more losses for the stock.

AMC stock price broke below the 100-day moving average on September 19 and the sell-off accelerated pushing the price to the lowest level since May 2021. Strong support would be met at $5.11 the low from April 13, 2021. If sellers break that level we can’t rule out a move down to $4.62 the low from March 4, 2021.

On the upside, minor resistance stands at $6.24 the daily top. More sellers are expected to emerge at $7.62 the high from October 6, 2022. What can cancel the recent bearish trend is the return of the price above the 100-day moving average at $9.07.

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