AMC Entertainment (NYSE:AMC) stock surged on Friday after Wedbush analyst Alicia Reese upgraded it from Neutral to Outperform and raised its price forecast from $3 to $4.
Reese noted that AMC will benefit from a steadier film release schedule in the coming quarters, which should support consistent box office performance.
According to the analyst, the company is well-positioned to gain market share in 2025 and 2026, thanks to its ownership of the highest number of premium screens in North America and expansion efforts in the U.K. and EU.
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She said AMC has repaid or deferred all debt due in 2026, easing near-term financial uncertainty.
Reese noted that the company is finishing its last major share issuance for the foreseeable future, removing a key overhang for investors.
In 2025, AMC plans to shut down unprofitable locations while investing in top-performing theaters. As per the analyst, these investments are already boosting revenue per screen, currently tracking 3% above 2019 levels.
Reese expects EBITDA to cover interest expenses, reducing AMC's need to issue more equity. Management has guided for flat year-over-year CapEx in 2025, indicating that theater upgrades require minimal spending.
Reese does not expect strong growth in 2025 or 2026. The theater industry remains low-growth and in recovery mode, she said. Over the next few years, the analyst projected mid-to-high single-digit growth in box office revenue, followed by low-to-mid single-digit gains thereafter.
She said AMC also has room to grow by expanding merchandise sales, improving concession revenue per customer, and leveraging its high fixed-cost model as overall revenue improves.
Reese revised her second-quarter estimates based on updated box office performance and adjusted our forward projections to reflect the latest industry trends.
North American box office for the second quarter reached 37.4%, ahead of her previous 27% estimate. The analyst estimated AMC captured 22.0% of that total, down 50 basis points year-over-year.
Reese changed her forecast of second-quarter revenue to $1.35 billion, up from her prior $1.25 billion estimate and above the $1.337 billion consensus. The analyst also raised her adjusted EBITDA estimate to $160 million, compared to $85 million previously and the $144 million Street forecast.
Looking ahead, she noted AMC is positioned to gain market share year-over-year, with more premium titles and IMAX content coming to theaters — where AMC leads with the largest IMAX and Dolby screen footprint.
AMC continues to generate $22–$23 in domestic revenue per attendee and about $16 internationally, both roughly 30% higher than pre-pandemic levels, Reese said.
AMC Price Action: AMC stock is up 9.83% at $3.30 at publication on Friday
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