Wedbush downgrades AMC Entertainment to sell, says retail will 'move on'

Wedbush analyst Michael Pachter downgraded AMC Entertainment to Underperform from Neutral with an unchanged price target of $7.50. The stock closed Wednesday up 5% to $40.79. "Ultimately the majority of retail ownership will eventually cash out and move on," Pachter tells investors in a research note. The analyst remains optimistic about the exhibition industry as attendance begins to rebound. Attendance in Q3 began to meaningfully pick up once top-tier titles were released to theatres after extended delays, and the Q4 quarter-to-date box office has been very encouraging, says the analyst. Nonetheless, he cites valuation for the downgrade of AMC. The $7.50 price target "generously" values the company at the high-end of its pre-Covid historical range of roughly 7 to 9 times enterprise value to EBITDA, Pachter notes.