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MKM Bullish On AMC's Earnings Report: Improved Attendance And Better Pricing For AMC Entertainment

On Monday, AMC Entertainment Holdings Inc AMC reported Q2 earnings per share of $0.24 vs. estimates of $0.27 and revenues $764 million vs. estimates of $773.0 million. Shares fell following the report, despite top analysts being bullish on the news.

MKM Partners' Eric Handler reiterated AMC Entertainment at Buy with a price target of $35.

The analyst provided a favorable rating on AMC due to the company's new marketing initiatives and pending M&A transactions. Handler believed news of $8-$10 million of incremental costs in 2H16 for the Stubs loyalty program and additional marketing expenses would yield a positive payoff in 2017 "via increased capita attendance, higher concession spending and margin expansion."

Strategic Pricing

Additionally, the MKM analyst applauded AMC's appointment of its first VP of pricing which"could lead to greater variable pricing for tickets depending on day and time as well as additional food and beverage combo deals."

According to TipRanks, Handler is among the best analyst's covering AMC Entertainment with a 68 percent success rating and +11.2 percent average return per recommendation.

At time of writing, AMC Entertainment traded at $27.87, down 2.04 percent.

DateFirmActionFromTo
Jun 2016B. RileyUpgradesBuy
Jun 2016Credit SuisseAssumesOutperform
Mar 2016B. RileyDowngradesBuyNeutral

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