AMC Entertainment (NYSE: AMC) shares surged 9% on Friday after it received a vote of confidence from Wedbush.
The firm upgraded the stock from “Neutral” to “Outperform” and raised its price target to $4 from $3. The revised target implies a potential upside of 33% from Thursday’s closing price.
In a research note, Wedbush analyst Alicia Reese pointed to several positive developments supporting the upgrade, including a more stable and consistent movie release calendar, strategic international expansion, and recent debt restructuring efforts that reduce near-term financial risk.
“AMC is poised to benefit from a more consistent movie release schedule over the next several quarters,” Reese wrote, adding that the company is also positioned to gain market share in 2025 and 2026.
The analyst cited AMC’s leadership in premium screens across North America and its expansion into the UK and EU as further tailwinds for the theater chain.
Debt burden eases as share dilution slows
A key driver of the improved outlook is AMC’s progress in managing its debt load.
The company recently completed a debt-restructuring agreement that will provide approximately $223.3 million in new financing to refinance obligations previously set to mature in 2026.
According to Reese, this development “relieves near-term uncertainty,” allowing AMC to focus on operational growth.
In addition, AMC is concluding what Wedbush expects to be its final major share issuance for the foreseeable future.
The analyst described this as removing a “significant headwind,” noting that future equity dilution is unlikely if the company’s financial performance continues to improve.
“With box office expected to be more consistent in the coming quarters, we expect AMC’s EBITDA to cover interest expense, relieving its need to issue more shares,” Reese added.
EBITDA, or earnings before interest, taxes, depreciation, and amortization, is widely used to assess core profitability.
Modest growth outlook despite operational improvements
While AMC is expected to benefit from a recovering box office and improved financial stability, Wedbush’s outlook remains measured when it comes to long-term growth.
Reese emphasized that movie theaters remain a low-growth sector undergoing a period of recovery.
“To be clear, we do not see substantial growth in 2025, 2026, or beyond,” she wrote, forecasting mid-to-high single-digit growth in box office revenue over the next few years, tapering to low-to-mid single-digit growth rates thereafter.
Nonetheless, AMC can still enhance performance through strategic efforts in merchandise and concessions.
The company has opportunities to increase revenue via improved concession attach rates and basket sizes, areas that management and peers are actively targeting.
AMC began the year facing a sluggish start at the box office, typically its weakest quarter.
However, CEO Adam Aron highlighted a rebound in demand since April 1 during the company’s first-quarter earnings call in May.
Aron also pointed to a strong lineup of upcoming blockbusters, including James Gunn’s Superman which has opened on Friday, Marvel’s Fantastic Four which opens later this month and the December release of Avatar: Fire and Ash, as potential box-office drivers in the months ahead.
AMC stock has struggled in 2025 so far with a 18% decline.
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