David Moadel
5 min read
Quick Read
-
AMC surged 83% and Cinemark 68% YTD, but AMC’s massive debt load and negative stockholders’ equity keep the bull case fragile.
-
Theater stocks crushed the S&P 500’s 12% gain, signaling the market is pricing in a real post-pandemic attendance recovery.
-
AMC’s $3.97B refinancing pushes debt into the next decade, lowering break-even box office needs but leaving a large debt pile intact.
-
Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now, and Cinemark didn’t make the cut. Enter your email to see the names that beat CNK. The report is free. Enter your email and see if any of your stocks made the cut.
Movie theater stocks have become one of the standout trades of the year, with AMC Entertainment (NYSE:AMC) shares leading the group. AMC shares are up 83% year to date (YTD) to $2.86, the largest gain among the biggest U.S. theater-linked names.
Also, Cinemark Holdings (NYSE:CNK) shares are up 68% YTD to $38.72. At the same time, IMAX (NYSE:IMAX) shares are up 38% YTD to $51.11, trailing both theater circuits.
As the largest U.S. theater circuit, AMC carries the heaviest debt load in the group. Cinemark runs a smaller and less leveraged circuit, while IMAX licenses its projection systems to theater owners and takes a share of box office receipts.
Refinancing Pushes AMC Debt Into the Next Decade
In early October, AMC completed a refinancing that moved almost all of its remaining debt maturities into the next decade. Earlier in the year, the company refinanced debt, converted exchangeable notes into equity and raised fresh equity capital.
Management has stated that lower leverage is expected to trigger reduced interest rates on most of its debt. AMC’s lower interest expense, as its chief executive has noted, also reduces the box office level the chain needs to break even.
——
Free Report, Just Released
Why Didn’t CNK Make The Top 10 List?
24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now. Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now.
And CNK didn’t make the cut!
The report is free, and you can see why we think each stock is a top investment today.
Enter Your Email and See the Ten →
——
AMC declared it expects this year to be the strongest year for theatrical exhibition since the pandemic. It cited a film slate that includes Spider-Man: Brand New Day, Dune: Part Three and Avengers: Doomsday.
