It would be easy to think that the catastrophic box office numbers out of Memorial Day weekend would prompt a substantial slide in share prices for companies that depend on those numbers, like beleaguered theater chain AMC (NYSE:AMC). That proved anything but the case, as shares were up over 4% in Tuesday afternoon’s trading despite a calamity in sales and some brewing distress from patrons.
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Memorial Day movie ticket sales were a disaster. In fact, the numbers revealed were some of the worst box office figures for a Memorial Day weekend since the 1990s. While hopes were high for the “Mad Max” tie-in “Furiosa,” as well as the latest attempt at “The Garfield Movie,” neither could produce a significant win.
While “Furiosa” managed to tip the scale at $32 million, that was actually the single-worst Memorial Day weekend number-one performance since all the way back in 1995. That was when “Casper” brought in a whopping—and unadjusted for inflation–$22.5 million. That also leaves 2020 out of the picture, with theaters closed by government mandate over the COVID-19 virus.
Concert Films Prompt Ire
Meanwhile, there’s another problem for AMC – its response to concert films. Reports noted that AMC leaked the Beyonce concert film ahead of schedule, but managed to not spill the beans about Taylor Swift’s. This led to Beyonce’s fanbase, collectively dubbed the “BeyHive,” declaring the move “extremely unprofessional.”
Further, fans insisted that Beyonce no longer do business with AMC theaters, and given the growing presence of concert films, that could be a problem going forward. However, both here and with the lackluster performance of Memorial Day, some are quick to note that the fallout from both actors’ and writers’ guild strikes is still being felt and likely will be for much of 2024 to come.
Is AMC a Buy or Sell Right Now?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on AMC stock based on four Holds and three Sells assigned in the past three months, as indicated by the graphic below. After an 87.66% loss in its share price over the past year, the average AMC price target of $4.68 per share implies 6.4% downside risk.
