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Why AMC Entertainment Stock Fell 5% Today

Motley Fool2021-08-19

What happened

Shares of AMC Entertainment Holdings (NYSE:AMC) stock stumbled 6% in early trading on the New York Stock Exchange this morning, and remain down 5% as of 10:45 a.m. EDT. But why?

I mean, didn't Citigroup just this morning raise its price target on the movie theater chain stock by 35%?

Image source: Getty Images.

So what

Well, yes, it did. As StreetInsider.com reports today, Citigroup this morning gave AMC a price target hike from $3.70 per share to $5 even. Problem is, right now AMC stock is trading closer to $35 a share than to $5. And this means that, basically, Citigroup just said AMC stock is doomed to lose about 85% of its value over the next 12 months.

As the analyst explained, not only has AMC been forced to take on a massive debt load, in excess of $11 billion, to keep itself solvent through the pandemic -- "elevated leverage" that is "an added risk to an uncertain recovery," in the analyst's view. On top of that, the rise of at-home video streaming and concurrent movie releases both in theaters and on folks' television sets means "the strategic role of exhibitors is diminishing," warns the analyst.

Now what

Little wonder, therefore, that Citigroup is maintaining its sell rating on this totally profitless stock. I can't say I disagree.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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Comment24

  • SL1977
    ·2021-08-20
    fool is a paid FUD. You can see why they have never stop criticising AMC stock. There are so many stocks to criticise and only AMC worthy of their most attention. Apes don’t need your advice. 
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  • Charging
    ·2021-08-20
    [微笑] 
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  • andrew123
    ·2021-08-20
    It will only go up only when all the millions of david support it. I guess many of the davids become long term hodl. Beginning david won. Now golaith won. Score 1-1
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  • Shan_2021
    ·2021-08-20
    Let Citigroup sell all the stock at present rate .. why bother to wait till it reach 5 uSD .hahaha . fool.com to back up but it never mentioned in Citigroup Twitter account .. will hold till the day I feel like I won’t watch movie in theatre… 
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  • MarkN
    ·2021-08-20
    Tough to compete
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    • Charging
      [微笑]
      2021-08-20
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  • Mccoy
    ·2021-08-20
    What is the long term plan for this? 
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  • KYHBKO
    ·2021-08-20
    price follow earnings in the long run. let us research and do our own due diligence
    Reply
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    • Aloynty
      Good point, dyod
      2021-08-20
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  • Lionel_yp
    ·2021-08-20
    Because some countries treating covid19 as epedemic
    Reply
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    • ramius75
      Sad
      2021-08-20
      Reply
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    • Lionel_yp
      Epidemic
      2021-08-20
      Reply
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    • klo
      h
      2021-08-20
      Reply
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  • Xue91
    ·2021-08-20
    Yaaa
    Reply
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  • SimonGoh
    ·2021-08-20
    ...
    Reply
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    • SimonGoh
      ...
      2021-08-20
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  • Alice156
    ·2021-08-20
    Please like and comments
    Reply
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  • Tatsuya
    ·2021-08-20
    No to meme stocks
    Reply
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    • Ti82
      Yeah
      2021-08-20
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    • Xue91
      Hmm
      2021-08-20
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  • neosg
    ·2021-08-20
    I think only fools will believe what Motley is writing about AMC lol...
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  • Chavvobimbo
    ·2021-08-20
    Hdidhebe
    Reply
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  • Chavvobimbo
    ·2021-08-20
    Nenejdnd
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  • LuffyDono
    ·2021-08-20
    [Cool] 
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  • happydylan
    ·2021-08-20
    Oh
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  • kevE
    ·2021-08-20
    As
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    • kevE
      As
      2021-08-20
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  • Fooyj898
    ·2021-08-19
    No
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    • tearach
      noo
      2021-08-19
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    • rooot
      Noooooo
      2021-08-20
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  • rachellll
    ·2021-08-19
    a
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