AMC Entertainment‘s stock price performance in 2021 has baffled pretty much everyone on Wall Street and beyond.
In case you’ve been living under a rock, AMC (ticker: AMC) stock—a favorite among retail investors and Reddit users—has climbed more than 1,900% year-to-date.
Now Citi analysts have raised their price target on the stock. That’s more good news for the shares, right?
Wrong.
The bank raised its target price from $5 to $6, well below Tuesday’s closing price of $42.60. For further context, the last time AMC was trading below $6 was in February this year.
It cited AMC’s third-quarter revenue and earnings, which came in above expectations, along with the movie-theater company’s fourth-quarter outlook, as reasons for the raise. As a result, Citi updated its model. The stock actually fell more than 11% in a single day after earnings were reported last week.
Citi maintained its Sell rating on the stock, clarifying its belief that AMC “remains overvalued at current levels.”
The bank isn’t an outlier; analysts covering the stock have an average target price of $5.58, according to FactSet data, with 67% having Sell ratings.
Wall Street seems intent on applying the old processes when it comes to valuing AMC stock, but it’s dealing with a different beast.
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