MW AMC's stock could get a boost from these three factors: analyst

By James Rogers

Movie-theater chain and original meme stock AMC reported fourth-quarter results last week

AMC Entertainment Holdings Inc. is in a good position for growth after the movie-theater chain and original meme stock reported better-than-expected fourth-quarter revenue last week.

"AMC's [fourth-quarter] 2024 outperformance relative to consensus expectations underscores strong consumer demand, operational efficiency, and strategic execution," Benchmark analyst Mike Hickey wrote in a note Monday. "The company's improving financial flexibility, premium format expansion, and favorable content slate for 2025 and 2026 position it well for continued growth."

Benchmark maintained its hold rating for AMC $(AMC)$ but lowered its estimate for fiscal 2025 earnings before interest, taxes, depreciation and amortization to $453 million from $548 million. All of the six analysts surveyed by FactSet have a hold rating for AMC.

Related: AMC's stock climbs as improving box office boosts Q4 revenue, while CEO slams 'crackpot conspiracy theorists'

"AMC expects the domestic box office to grow between $500 [million] and $1 [billion] in 2025 compared to 2024, driven by a stronger film slate and increasing consumer demand," Hickey wrote. "The company anticipates sequential improvement across quarters, with [the second quarter] expected to significantly outperform [the first quarter] due to a heavier release schedule."

More than 62 million customers visited AMC theaters worldwide during the quarter, marking a postpandemic fourth-quarter record, according to AMC. Speaking during the conference call to discuss the results, AMC Chief Executive Adam Aron said he anticipates a "vibrant summer for moviegoing." He also noted that AMC will close out 2025 with blockbusters such as the second part of "Wicked," Walt Disney Co.'s $(DIS)$ "Zootopia 2" and the next installment of James Cameron's "Avatar."

Benchmark's Hickey also pointed to AMC's efforts related to its balance sheet and capital allocation. "AMC continued strengthening its balance sheet," he wrote, noting that the company reduced its total debt and finance lease obligations by $375.9 million in 2024. "The company successfully extended $2.4 [billion] of debt maturities from 2026 to 2029 and beyond, securing greater financial flexibility."

Related: AMC's most liquid bond is rallying following the movie-theater chain's fourth-quarter results

"AMC continues optimizing its theater portfolio, having closed 192 underperforming locations since the pandemic while adding 62 high-performing theaters," Hickey said. "The company is prioritizing targeted investments in high-performing locations and premium formats to enhance future profitability."

As of Dec. 31, 2024, AMC had 184 IMAX screens, making it the largest IMAX exhibitor in the U.S., with 56% market share, according to the 10-K filing that accompanied its quarterly results. Additionally, AMC had 36 IMAX screens in international markets. As of the end of 2024, AMC operated 167 Dolby Cinema screens at its auditoriums in the U.S. and seven internationally.

In calendar 2025 and 2026, AMC expects to upgrade more of its IMAX auditoriums to the IMAX Laser projection system, Aron said during the company's fourth-quarter conference call. It also intends to add more Dolby Cinema screens, he said.

Related: AMC poised for 'multiyear recovery' fueled by strong 2025 film slate, says analyst

As of the end of 2024, AMC leased or operated 871 theaters and 9,798 screens in 11 countries, with 544 theaters and a total of 7,185 screens in the U.S. and 327 theaters with 2,613 screens in Europe.

AMC shares are down 24.2% in the last 12 months, compared with the S&P 500 index's SPX gain of 15.9%.

-James Rogers

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March 03, 2025 11:16 ET (16:16 GMT)

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