AMC Entertainment Holdings (NYSE:AMC) will report its second quarter earnings next week, with Wedbush analysts expecting a solid report with potential for upside.
“We remain positive into the Q2 print, which should highlight AMC’s strengths geographically and with its premium screens, likely driving market share gains,” analysts wrote.
Wedbush said it remains upbeat on AMC, citing expectations for a steadier release schedule in the coming quarters, anticipated market share gains in 2025 and 2026 supported by its large premium screen footprint in North America and planned growth in the UK and EU, the repayment or deferral of all 2026 debt that eases near-term risk, and the completion of what the firm expects will be the company’s final major share issuance for some time.
“AMC will continue to close unproductive doors as it shores up its balance sheet in 2025, while investing in its most productive theaters to drive more revenue per screen, which is trending 3% higher than 2019 before incremental investments,” Wedbush wrote.
“With box office expected to be more consistent in the coming quarters, we expect AMC’s EBITDA to cover interest expense, relieving its need to issue more shares.”
Wedbush projects second-quarter revenue of $1.350 billion, slightly below the $1.352 billion consensus, adjusted EBITDA of $160 million with a 12% margin compared to 3% a year earlier versus the $155 million consensus, and a loss of $0.10 per share compared with the $0.08 consensus loss.
The firm’s model assumes a 29% year-over-year increase in domestic attendance and a 5% rise in domestic revenue per patron to $23.54, while noting potential for results to exceed those estimates.
“In forward quarters, we think AMC is positioned to gain market share year-over-year as there are more premium films hitting screens and more filmed-for-IMAX titles (AMC has the largest IMAX footprint, and Dolby screens when there are multiple hit movies playing),” Wedbush wrote.
“AMC now consistently draws $22 to $23 in domestic revenue per attendee and around $16 per international attendee, roughly 30% higher than pre-pandemic.”
Looking ahead, Wedbush anticipates mid-to-high single-digit growth rates in box office revenue over the next few years, followed by low-to-mid single-digit growth rates thereafter.
“Additionally, AMC and its peers can continue to expand merchandise sales and improve concession attach rates and basket size, all while gaining meaningful leverage as revenue improves in this high-fixed-cost business,” they wrote.
The analysts repeated their ‘Outperform’ rating on AMC and $4 price target. Shares traded hands at $2.80 on Wednesday.
AMC will hand down its Q2 report on August 11.