AMC Entertainment's Convenience Initiatives Yield Growth; Target Raised To $40 By Barrington Research

In a report published Friday, Barrington Research analyst James C. Goss maintained an Outperform rating on AMC Entertainment Holdings Inc (NYSE: AMC), while raising the price target from $32 to $40. The company had a "record year despite soft box office," Goss wrote.

In the report, Barrington Research noted, "Revenues were nominally lower at $712.2 million, below our $721.0 million estimate, with AMC's IMAX position playing a role in per screen comps. Adjusted EBITDA of $140.1 million topped our $129.4 million estimate, a significant increase from the $112.9 million level reported a year ago. EPS of $0.30 were above our $0.26 estimate on net income of $29.8 million."

"AMC's customer convenience initiatives are successfully providing multiple levers to enhance growth and profitability. These various initiatives interact in a variety of ways that increase the complexity of the facilities management and customer interaction process but in a positive, competitive tension manner," the analyst commented, while adding, "Management stresses that the long tail of operational improvements in the reseated theatres is a result of offering the whole array of comfort and convenience options…the reseated theatres continue to achieve double-digit attendance growth, resulting from the full suite of convenience offerings and the combined impact of attendance gains early on supplemented with price increases a little later as the pace of gains in attendance begins to moderate."