AMC Entertainment Holdings Inc

AMC Entertainment Holdings, Inc. (NYSE: AMC) is a movie exhibition company. The Company is principally involved in the theatrical exhibition business and owns, operates, or has interests in theatres primarily located in the United States and Europe. The Company operates through two segments: U.S. markets and international markets. In the U.S. markets segment, it owns, leases, or operates theatres in 43 states and the District of Columbia. The International markets segment has operations in or partial interest in theatres in the United Kingdom, Germany, Spain, Italy, Ireland, Portugal, Sweden, Finland, Norway, and Denmark.

Recent Business and Financial Updates:

• First Quarter 2024 Financial Performance: In the first quarter of 2024, AMC Entertainment Holdings, Inc. reported total revenues of USD 951.4 million, a slight decrease from USD 954.4 million in the same period of the previous year. Despite this, there was a notable improvement in net loss, which decreased to USD (163.5) million compared to USD (235.5) million in Q1 2023. Similarly, net loss per diluted share also showed improvement, declining to USD (0.62) from USD (1.71) in the first quarter of the prior year. Adjusted EBITDA stood at USD (31.6) million, contrasting with USD 7.1 million in Q1 2023. It's noteworthy that the prior year's results for the quarter ended March 31, 2023, included a USD 16.7 million benefit to Adjusted EBITDA related to the early termination of a theatre lease. Net cash used in operating activities amounted to USD (188.3) million, slightly lower than USD (189.9) million in Q1 2023. As of March 31, 2024, cash and cash equivalents totaled USD 624.2 million.
• Cash, Balance Sheet, and Capital Markets Activity: At the end of the first quarter of 2024, AMC had cash of USD 624.2 million, excluding restricted cash of USD 36.5 million. During this period, AMC exchanged USD 17.5 million aggregate principal amounts of the Second Lien Notes due 2026 for 2.5 million shares of Class A common stock. Subsequently, through May 8 of the second quarter of 2024, AMC raised gross proceeds of USD 124.1 million from the sale of 38.5 million shares of Class A common stock.
• CEO Commentary and Future Outlook: Adam Aron, Chairman and CEO of AMC, expressed satisfaction with the company's first-quarter performance, highlighting that AMC surpassed consensus estimates for revenue, Adjusted EBITDA, net income, and diluted earnings per share. Despite challenges such as the impact of the Hollywood strikes of 2023 on the box office, Aron emphasized the resilience of moviegoing in March and the company's proactive measures to address near-term challenges. Aron also emphasized AMC's ongoing efforts to reduce debt, extend debt maturities, and bolster cash reserves. Looking ahead, Aron expressed confidence in the company's recovery trajectory, citing optimism about the upcoming film lineup and partnerships with musical artists like Billie Eilish for unique events in AMC theatres. Aron's statements underscore AMC's commitment to financial resilience and innovation amidst evolving market conditions.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands upward trending with an overbought value of 86.40, with expectations of a consolidation or a correction in the stock price. Additionally, the stock's current positioning is above the 21-period SMA and 50-period SMA, which may serve as dynamic short to medium-term support levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘WATCH’ rating has been given to AMC Entertainment Holdings, Inc. (NYSE: AMC) at the current market price of USD 8.17 as of May 14, 2024, at 09:20 AM PDT. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is May 14, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.