The company’s stock is still down more than 30% from a year earlier.
On Friday, shares of AMC rose nearly 10% after receiving bullish feedback from Credit Suisse. Analyst Meghan Durkin initiated the stock at an outperform rating. In many ways, this rating was surprising given that the company has largely underperformed over the past year.
AMC’s stock is down more than 14% year to date and 33% from a year earlier. The company launched a subscription-based program that lowered ticket prices and most analysts have lowered their earnings forecasts.
But according to Durkin, this gives investors an “attractive entry point” to buy shares of the stock. She set the company’s price target at $18 which indicates a 70% upside from its closing price on Friday.
Here’s what you need to know about AMC
On some level, there is an argument to be made for AMC’s success. A strong movie lineup for the remainder of 2019 makes it likely that more people will be going to the theatre.
Even after releasing a disappointing first-quarter earnings report in May, the company was optimistic about its forecast for the rest of the year. AMC executives said that given the timing of when the most popular movies would be released, it would be “back-end loaded year.”
One of the things AMC has done well over the past year is to launch its AMC Stubs A-List program. Members pay $19.95 per month and can watch up to three movies per week in the theatre, The program has been a hit and the company added 860,000 members in its first year.
But even though the Stubs A-List program has been a winner, it’s hasn’t been enough to boost the company’s stock. AMC lost more than 30% of its value since launching the program.
Will AMC’s stock continue to rebound?
Durkin’s comments gave AMC’s stock a boost but she is the exception when it comes to the outlook on AMC. Overall, Wall Street still has too much uncertainty regarding the company.
Most believe the company will merely break even in 2020 which is far from a ringing endorsement. It’s probably best to wait for more tangible signs of growth from AMC before investing in the company’s shares.