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AMC Jumps 10% After-Hours On Bullish 70% Re-Opening Plan
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AMC Jumps 10% After-Hours On Bullish 70% Re-Opening Plan

Shares in AMC Entertainment (AMC) jumped 10.4% in Tuesday’s after-hours trading, after the cinema giant announced that 70% of its US theaters will be re-opening this Friday.

“By September 4, moviegoers can enjoy Warner Bros.’ TENET and all of this summer’s newest releases at approximately 420 AMC locations nationwide, which is approximately 70% of AMC’s overall U.S. theater count” AMC cheered on September 1.

It also expects to resume operations at approximately 140 additional locations this week, with the vast majority reopening on Thursday, September 3. This is the same day Warner Bros’ Tenet- one of the first big-budget releases since the pandemic struck- opens in the US.

And looking forward, AMC expects to make announcements about additional reopenings in California, New Jersey and other areas in the US in the coming weeks, when allowed by local ordinances.

Adam Aron, CEO, commented: “The first two weekends of operations have exceeded our expectations in terms of guests returning to the movies and in terms of their feedback about our extensive AMC Safe & Clean policies and procedures.”

Indeed AMC is implementing social distancing through limiting ticket sales and automatic seat blocking, as well as contactless ticketing, enhanced cleaning procedures and a mandatory mask policy.

Shares in AMC have plunged 16% year-to-date- and analysts are staying cautious for now with a Hold Street consensus. Meanwhile the average analyst price target indicates that shares could drop a further 29% from current levels.

“We think the release slate as currently scheduled is overly optimistic, and believe the probability of re-shuttering theaters and further release slate delays presents a real risk to the industry, and AMC in particular” warned Wedbush analyst Michael Pachter on August 31.

He reiterated his hold rating on the stock, but boosted his price target from $4 to $7. The analyst expects a slow recovery throughout AMC’s global footprint, with Europe re-opened at reduced capacity, and AMC’s domestic footprint re-opening but likely not normalizing until Q2:21. (See AMC stock analysis)

AMC stock

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