AMC stock is worth less than a movie ticket: analyst

Wall Street pros continue to come out in force to remind retail traders of going all in right now on meme stock favorite AMC Entertainment (AMC).

Macquarie analyst Chad Beynon and his team reiterated their $6 price target (the cost of one ticket at an AMC theater is about $14) and Neutral rating on AMC in early afternoon trading Thursday. While the group commended AMC CEO Adam Aron for his embrace of the enthusiastic retail trading community and voiced optimism on a box office recovery post-pandemic, the analysts remain concerned about the company's balance sheet.

"Despite shares now up 2,850% year-to-date (as of 6/2 close) vs. the S&P 500 of 12%, AMC balance sheet is still hampered by nearly $5.5 billion of debt as of the end of 1Q21 and our projected leverage of 12.3x by year end 2022. AMC, the largest global player (945 theaters) should benefit from the rebound in theatre demand, which is urgently needed in order for the company to address deferred rent ($450 million+), maintenance capex (~$100 million), and high annual interest (~$420 million)," said the note.

The analyst team sees AMC losing nearly $2.5 billion from 2021 to 2023 on an adjusted operating profit basis. But, the note added the financial estimates are "under review."