Shares of AMC Entertainment (NYSE:AMC) stock are in the spotlight following a Schedule 13G update from Vanguard.
As of the end of the first quarter, Vanguard owned 24.80 million shares of AMC stock. The investment services company revealed in a filing that it now owns 30.51 million shares as of June 28, meaning that it increased its position by 5.71 million shares or by 23%. Its position is equivalent to a 10.32% ownership stake.
There is a caveat here, however. Vanguard is one of the world’s largest exchange-traded fund (ETF) and mutual fund providers. That means it’s not an active investor and that its purchase could have been in response to a rebalancing or an inflow in its funds.
Still, a buy is a buy, and Vanguard’s increased AMC position is ultimately a positive for the movie theater chain. Based on combined 13G and 13F data, AMC is now Vanguard’s 1,666th largest position out of 4,449 total holdings.
AMC Stock: Vanguard Increases Stake by 23%
AMC stock has shed about 14% this year, and the loss would likely have been greater without the resurgence of Roaring Kitty. However, the box office has recently begun to show some green shoots.
Between Wednesday, July 3, and Sunday, July 7, 4.2 million domestic moviegoers sat down at an AMC theater, marking the company’s busiest Wednesday to Sunday period in 2024. On July 3, AMC reported its highest Wednesday food and beverage revenue since 2020.
Despicable Me 4 was responsible for attracting many of the moviegoers and has raked in over $255 million worldwide. Inside Out 2 has been the most popular movie in 2024 so far with a worldwide box office of $1.25 billion.
These signs encouraged Macquarie analyst Chad Beynon to raise his price target to $4 from $3.50, signaling a downside of 23% from current prices. The analyst maintained his “underperform” rating.
“Given recent equity raise, high interest (>$300m), and deferred rent (~$50m), we reiterate Underperform, although we think valuation is starting to look more reasonable given an improving overall box office outlook,” wrote Beynon.
AMC’s debt is still a major problem for the company and will likely continue to act as an overhang. Total debt was $4.6 billion as of the end of Q1.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
