AMC Entertainment (AMC) shares are rising 3% in Thursday’s pre-market trading after the world’s largest theatre exhibitor announced plans to resume operations of 14 theaters in Michigan and California. The theatres were temporarily shut down due to the COVID-19 outbreak. With these reopenings, more than 80% of all AMC US locations will have resumed operations.
AMC has in recent weeks been reopening its theatres in a phased manner with the easing of lockdown restrictions in some locations. The company will reopen 2 theatres in California on Oct. 2. It has already resumed operations at theatres in the San Diego area, as well as locations in Orange County and Riverside County. In Michigan, AMC will be reopening 12 theatres as of Oct. 9. (See AMC stock analysis on TipRanks)
AMC CEO Adam Aron commented: “We continue to reopen responsibly. We’re seeing record-high guest scores for the cleanliness of our theaters, far exceeding the marks we’ve received in the decades we’ve been tracking guest feedback. AMC Safe & Clean is the cornerstone of our efforts to woo back moviegoers to cinemas.”
Last month, Wedbush analyst Michael Pachter raised AMC’s price target to $7 from $4 but maintained a Hold rating on the stock. Pachter said “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.”
The analyst added, “We expect 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.”
Currently, the Street has a Hold consensus for AMC based on 3 Holds and 1 Sell rating. With shares down 35% year-to-date, the average analyst price target of $4.83 implies upside potential of 2.6% in the coming months.
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