Shares of AMC Entertainment Holding Inc.
ran up 4.4% in morning trading Wednesday, after MKM Partners analyst Eric Handler backed off his bearish stance on the movie theater chain, saying the near-term risk of a bankruptcy has “lessened considerably.” Handler raised his rating to neutral, after cutting it to sell on April 9, and raised his stock fair value estimate to $5 from $1. He said the bankruptcy risk has been reduced given the increasing likelihood that theaters in the U.S. and Europe will be able to reopen in the July-August time frame with new Hollywood content, and the because of AMC’s improved liquidity position. “We are still concerned about AMC’s net leverage and absolute level of debt, but believe with the expected re-opening of the company’s circuit within the next two months there is sufficient cash on hand to get through the end of the year,” Handler wrote in a note to clients. The stock has more than doubled (up 157%) since it closed at a record low of $2.08 on April 13, as the company announced a measures to boost liquidity in April and after a report last month that Amazon.com Inc.
had expressed interest in buying the company. The stock has still lost 26.3% year to date, while the S&P 500
has declined 7.0%.