AMC's revenue, Ebitda estimates raised by B. Riley, citing industry strength

By James Rogers

The movie-theater chain and original meme stock is riding a broader industry rebound, according to an analyst at B. Riley Securities

AMC Entertainment Holdings Inc. is riding a broader cinema-industry rebound, according to an analyst at B. Riley Securities, which has raised its financial estimates for the movie-theater chain.

In a note released Thursday, B. Riley raised AMC's (AMC) third-quarter revenue estimate to $1.315 billion from $1.260 billion, while also lifting its estimate for adjusted earnings before interest, taxes, depreciation and amortization, or adjusted Ebitda, to $172 million from $135 million.

B. Riley analyst Eric Wold pointed to "an expectation that the domestic and European AMC circuits continued to benefit from share gains coming out of the pandemic" amid "upside" industry results.

"As attendance continues to recover with a more consistent film slate in the years ahead, these recent trends give us increased confidence in the company's ability to surpass prepandemic [adjusted Ebitda] levels even if attendance never fully recovers (as we suspect it will not)," wrote Wold.

Related: AMC shares climb as company shaves almost $153 million off debt load

Analysts surveyed by FactSet are looking for AMC to report third-quarter sales of $1.311 billion. AMC met Wall Street's expectations when the company reported its second-quarter results in August.

AMC shares were down 1.1% on Friday.

During the third quarter, domestic industry box-office revenues came in at an estimated $2.66 billion, according to B.Riley, well ahead of the analyst firm's $2.39 billion projection. This represented flat results compared to the year-ago period but recovery to around 95% of the prepandemic third quarter of 2019, B. Riley noted.

Related: AMC's debt restructuring bodes well for box-office recovery, analyst says

Against this backdrop, Imax Corp. (IMAX) is B. Riley's top sector pick for 2025, thanks to the slate of films playing on Imax screens globally and the proportion of those films containing "Imax DNA" aimed at the Imax format. B. Riley also pointed to the potential benefit of accelerating Imax system demand in underserved regions, and the likelihood that the Chinese government's stimulus package reverses recent demand headwinds in that country.

Imax shares were also down 1.1% on Friday.

-James Rogers

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10-04-24 1432ET

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