Benchmark analysts have reiterated their Hold rating on AMC Entertainment (NYSE: AMC) stock, citing a challenging start to the year for the movie theater chain amid a sluggish box office environment.
The firm pointed to a significant decline in domestic box office revenue in the first quarter, which fell 11.6% year-over-year to $1.42 billion. The downturn was primarily attributed to a lack of standout film releases, with the box office relying heavily on holdover titles from the previous quarter. This dynamic likely contributed to higher film rental costs without generating strong audience turnout.
In light of these conditions, the analysts forecast AMC’s revenue and Adjusted EBITDA (AEBITDA) to decline sequentially from the last quarter. In Q4, AMC set a post-pandemic record, reporting revenue of $1.3 billion, an 18% year-over-year increase. AEBITDA more than tripled to $164.8 million, and the company also hit a post-pandemic attendance record with 62 million guests.
While the first quarter is typically the slowest period of the year for AMC, analysts are adjusting their expectations in line with this seasonal trend, anticipating weaker financial results following the record-setting fourth quarter.
Benchmark advised investors to remain cautious, noting limited near-term catalysts for the stock given the current state of the box office. As of press time, AMC hasn’t responded to the analyst report or announced any plans to address the slowdown.
As of press time, AMC Entertainment (NYSE: AMC) shares are up 1.07%, trading at $2.83.
Kevin Putnam is a financial journalist and editor based in New York. He specializes in editing news and analysis related to U.S. stock market. Read Full Bio
