AMC Entertainment Holdings (AMC:NYE) Citigroup Restarts with a “Sell” Rating

Analyst Coverage Change

AMC Ratings by Stock Target Advisor

Citigroup(Rank#9) has reinstated coverage on AMC Entertainment Inc., a move that has caught the attention of investors in the entertainment industry. In its report, Citigroup has given a “Sell” rating for the company, with a target price of USD 1.6. This development has come amidst a time of significant changes and challenges for the entertainment industry, especially given the impacts of the COVID-19 pandemic.

The announcement by Citigroup has raised eyebrows amongst investors who have been following the resurgence of AMC, which has been on an upward trajectory since early 2021. The entertainment company, which operates movie theaters across the United States and globally, has benefited from the reopening of economies following the pandemic-induced shutdowns in 2020. In addition, the company has also witnessed significant interest from retail investors who have been buying up AMC shares in large volumes, resulting in stock price spikes and volatility.

Despite this optimism, Citigroup’s report highlights potential challenges for the company, which has been facing intense competition in the movie theater industry.

Citigroup’s report also notes that the retail investor frenzy that has propelled AMC’s stock price may not be sustainable over the long term. As retail investors often buy and sell based on sentiment, rather than financial fundamentals, there is a risk that AMC’s stock price may not reflect the true value of the company’s underlying assets.

The move by Citigroup to reinstate coverage on AMC and give it a “Sell” rating is significant, as it may prompt investors to reconsider their positions on the company. It may also signal a shift in sentiment amongst institutional investors, who tend to have a more conservative approach to investing.

Citigroup’s analysis also underscores the potential challenges facing the entertainment industry as a whole. While AMC has benefited from the reopening of economies and the retail investor frenzy, there are more issues at play that could affect future valuation metric of the stock

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