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AMC Entertainment reports fourth-quarter earnings on Tuesday.
Angela Weiss / AFP via Getty Images
Moviegoers expect vaccine spread and looser restrictions on public meetings to help their business back down after a bleak 2020, but not all chains are the same.
AMC Entertainment
Holdings (ticker: AMC), the largest theater operator in the United States, has raised more than $ 1 billion in cash through stock sales and convertible debt since the fall to build a pillow until the business can return to normal. But that puts him at a disadvantage, according to Richard Greenfield of LightShed Partners.
The analyst started AMC shares in a sale on Wednesday, setting a price target at 1 cent, saying the company’s multiple is not justified given its indebtedness and cash flow.
The company is likely to discuss its expectations regarding the impact of mass vaccinations and the reopening of the economy when it reports earnings Wednesday evening after the bell. Last month, CEO Adam Aron said the reopening of movie theaters in New York City — with some Covid-related restrictions — was “another important step toward the health industry’s recovery.” the cinemas and our company “. In January, Aron ruled out the need to file for bankruptcy, after the company had raised more cash.
Shares of AMC, which have been trapped by Robinhood’s retail frenzy, rose 13.2% Wednesday in volatile operations. But they lost momentum and rose just 2.4%, to $ 10.75, in a recent check. They have increased by about 400% so far this year compared to
S&P 500
4% year-on-year gain.
According to Greenfield’s calculations, at Tuesday’s closing price of $ 10.50, AMC shares are trading at more than 15 times the estimated adjusted earnings in 2022 before interest, taxes, depreciation and amortization, or Ebitda. And that Ebitda is “in secular decline from now on with effectively no free cash flow and debt-EBITDA greater than 8 times,” it said in a note.
He described the actions as “drastically overvalued”.
Analysts followed by FactSet expect AMC to report a fourth-quarter loss of $ 3.24 per share during the quarter with anemic revenue of $ 142.3 million. For the full year 2020, the forecast is a loss of $ 31.18 per share on sales of $ 1.2 billion.
Throughout 2019, AMC reported a loss of $ 1.08 per share in sales of $ 5.555 billion. In 2019, AMC reported adjusted EBITDA of $ 771 million, Greenfield said, but predicted that the same metric for 2022 will struggle to reach $ 600 million.
He argued that it is not just the persistent unwillingness of some moviegoers to return to cinemas in person without knowing the vaccine status of those seated around them. Hollywood studios have changed the habits of consumers by releasing new films via streaming on demand, on demand and by backtracking or narrowing the window of theatrical releases.
This means that forecasting box office sales for AMC’s domestic and international screens is complicated. Greenfield estimates a single-digit increase over 2019 for AMC’s domestic sales in 2022 (ignores 2020 and 2021 due to the pandemic). But he adds, “I honestly feel it could be significantly worse.”
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