FBR Capital Releases a Buy Rating on AMC Entertainment

By Carrie Williams

In a report released yesterday, Barton Crockett from FBR Capital reiterated a Buy rating on AMC Entertainment (NYSE: AMC), with a price target of $37. The company’s shares opened today at $31.

Crockett said:

“On Wednesday evening, April 19, AMC sort of preannounced 1Q17, saying its adj. EBITDA (in a noisy, transitional quarter that was the first full period with the recently acquired Odeon and Carmike chains and had four days of the Nordic chain acquired on 3/28) topped the FactSet consensus of $214M. AMC was not more specific, so we do not know how much it topped the EBITDA consensus. For now, we see no reason to change our $276M 1Q17 estimate. AMC also detailed several below-the-line items (D&A, interest, M&A cost, average shares) that on balance were somewhat dilutive versus our view of EPS but accretive versus our view of FCF/share. Our $37 PT is based on an SOTP that is focused on EBITDA multiples, so nothing disclosed here affects our PT, and on balance, the statement should be helpful for the equity, as it supports the argument for a northward bias to the consensus for core EBITDA. We estimate 2017 adj. EBITDA of $952M.”

According to TipRanks.com, Crockett is a 5-star analyst with an average return of 8.7% and a 64.2% success rate. Crockett covers the Services sector, focusing on stocks such as Liberty Media Corporation Series A Liberty SiriusXM Common Stock, The Liberty Media Group, and The Liberty Media Group.

Currently, the analyst consensus on AMC Entertainment is Strong Buy and the average price target is $37.50, representing a 21.0% upside.

In a report issued on April 17, Barclays also reiterated a Buy rating on the stock with a $36 price target.

Based on AMC Entertainment’s latest earnings report for the quarter ending December 31, the company posted quarterly revenue of $926 million and quarterly net profit of $33.24 million. In comparison, last year the company earned revenue of $766 million and had a net profit of $28.29 million.

Based on the recent corporate insider activity of 31 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of AMC in relation to earlier this year.

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AMC Entertainment Holdings, Inc. engages in the theatrical exhibition business. It operates through the United States (U.S.) Markets and International Markets segments. It owns and manages AMC Theatres, AMC Dine-in, and MacGuffins Bar. The company was founded on June 6, 2007 and is headquartered in Leawood, KS.