AMC Entertainment (NYSE:AMC) stock rallied 10% on Friday after Wedbush analyst Michael Pachter upgraded the theater chain from Neutral to Outperform, boosting the price target from $3.00 to $4.00.
Pachter cited several positive factors driving the upgrade, including a steadier film release schedule in upcoming quarters and the potential for AMC to gain market share throughout 2025 and 2026. He highlighted AMC’s leading premium screen presence in North America, along with its expansion efforts in the UK and European markets.
The analyst also emphasized AMC’s improved debt position, noting that the company has either repaid or deferred all debt due in 2026 and appears to be nearing the end of major share issuances for the foreseeable future.
AMC plans to shutter less profitable theaters and focus investments on its highest-performing locations, where revenue per screen has already surpassed 2019 levels by about 3%. With box office performance expected to stabilize, Pachter projects AMC’s EBITDA will be sufficient to cover interest expenses, removing the need for additional equity offerings.
Wedbush applied an 8x EV-to-EBITDA multiple to AMC, consistent with historical averages seen during periods of strong box office performance. While expecting moderate growth, Pachter forecasts mid- to high-single-digit box office revenue growth over the next few years, followed by slower growth.
Prior to Friday’s surge, AMC shares closed Thursday at $3.01.
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