Theatrical exhibition major AMC Entertainment Holdings, Inc. (NYSE:AMC) announced that the company has entered into lease agreements, and plans to reopen theatres in the Chicago and Los Angeles markets. The theatres in both cities are expected to open in the spring of 2022.
Following the news, shares of the company declined marginally to close at $28.62 during the extended trade.
Strategic Impact
The Chicago and Los Angeles theatres have been high-footfall entities in the past for AMC, and the reopening is aimed at regaining a stronger foothold in these markets again.
Located in Northridge, Calif., the AMC Northridge Fashion Center 10 was previously a Pacific theatre. While the AMC Chicago 14 was an Arclight location in NEWCITY located in the Lincoln Park neighborhood.
AMC is expected to report its upcoming earnings for the fourth quarter on March 3, 2022.
Management Commentary
CEO of AMC, Adam Aron, said “These theatres have previously been high-traffic, successful locations, in two of AMC’s top markets, and we are pleased to offer the AMC experience at them a few months from now in 2022. Our most recent acquisitions of AMC The Grove 14 and AMC Americana at Brand 18 are already showing their success as those locations routinely finish in the top 10 theatres in box office performance among more than 150 theatres in the LA market, and in the top 30 in the entire United States.”
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Analyst Ratings
Recently, B. Riley Financial analyst Eric Wold reiterated a Hold rating on the stock with a price target of $16, which implies downside potential of 44.2% from current levels.
Consensus among analysts is a Moderate Sell based on 2 Holds and 2 Sells. The average AMC price target of $8.17 implies downside potential of 71.5% from current levels. However, shares have gained a whopping 1020.31% over the past year.
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