AMC Entertainment Holdings, Inc. (AMC) shares added to Wednesday’s gains in extended-hours trade after the movie theater operator said that most of its U.S. cinemas will reopen by March 26. The announcement comes just hours after the Walt Disney Company (DIS) said it plans to open its California theme parks to a limited capacity on April 30.
Throughout the pandemic, movie theater chains have not only had to contend with shutting cinemas but also with filmmakers moving releases to video on demand or streaming services. During the fourth quarter, Disney decided to move its highly anticipated film “Soul,” produced through its Pixar animation studio, to its streaming service, Disney+.
However, in a much-needed boost for cinemas, the reopening of AMC theaters coincides with the release of the latest James Bond movie “No Time To Die,” which hits the big screen on April 2. The maker of Bond films – EON Productions Limited – delayed the release date several times over the past year to allow the film to be seen by a worldwide theatrical audience.
Through Wednesday’s close, AMC stock has a market capitalization of $6.81 billion and trades 539% higher since the start of the year – in part, due to a social media-induced speculation rally. In the past five days alone, the shares have gained nearly 40%.
Wall Street View
Riley Securities analyst Eric Wold raised the firm’s price target on AMC Entertainment to $7 from $5.50 and kept his ‘Neutral’ rating on the stock. Wold told investors in a research note that the company’s fourth-quarter sales came in ahead of expectations thanks to a stronger than anticipated performance at theaters and ongoing expense controls. The analyst also believes the movie operator sits well positioned to benefit from a box office rebound in 2022.
Coverage elsewhere on Wall Street remains thin, given the stock’s recent volatility. It currently receives five ‘Hold’ ratings and four ‘Sell’ ratings. Price targets range from a high of $7 to a low of just $1, with the average target pegged at $3.44.
Technical Outlook and Trading Tactics
AMC shares broke above an extended downtrend line in late January, rocketing up to $20.36 on social media trading speculation. However, the rally was short-lived, with the price subsequently retracing back to the downtrend line. More recently, the stock flipped resistance into support at that level and has continued to trend sharply higher.
Active traders who want to play short-term momentum should target a move back to the all-time high (ATH) while managing risk with a stop-loss order placed under the March 15 low at $11.85. Longer-term investors should look to buy the stock near an uptrend line connecting the January and February swing lows.
For a look at today’s earnings schedule, check out our earnings calendar.