AMC stock price increase of 13% in pre-market
The company reported a second-quarter loss of 71 cents per share, which was 20 cents better than expected, and revenue of $444.7 million. Refinitiv polled analysts, who predicted $382.1 million in revenue. The company also announced that by the end of the year, it will begin accepting bitcoin as payment for tickets.
“In comparison to our estimates, AMC reported more average open screens, higher global attendance, and higher per-caps overall. Pent-up demand in its markets, combined with aggressive marketing to its customers, drove moviegoers to the theaters, according to Wedbush analyst Alicia Reese in a note. The stock has a neutral rating from the firm.
In premarket trading, the theater chain’s stock was up 7%.
AMC has been one of the most popular meme stocks among retail traders this year, and the company has sold tens of millions of shares to capitalize on the new demand. According to Wedbush, AMC has “made the most of its ‘Meme Stock’ status.” Citi analyst Jason Bazinet, who has a sell rating on the stock, noted that the company now has roughly $2 billion in liquidity.
“AMC’s second-quarter revenue and adj. EBITDA was well above the Street, and the company’s capital position remains strong. “We anticipate a positive reaction from the stock,” according to the Citi note.
According to Eric Wold of B., the company’s stated strategy of acquiring more theaters may work due to the faster-than-expected recovery and large capital raises. Riley Securities is an investment firm. The stock has a neutral rating from the firm.
“In addition to our prior belief that AMC could gain market share as the industry recovers through improved loyalty and a dominant IMAX screen base, we now see proactive and opportunistic moves by management to add theaters to the circuit as providing another market share tailwind into 2022 and beyond—when the film slate strengthens and exclusive theatrical windows become the norm,” Wold said.
“We now believe the domestic box office will be less than $5 billion this year, with $8.5 billion expected next year and less than $10 billion in 2023. Under that scenario, we believe it will be difficult for AMC to generate adjusted EBITDA within 10% of what it earned prior to the pandemic, despite the fact that the enterprise value has nearly tripled,” Gould wrote in a note.
Best stocks according to Barclays
According to FactSet as of Monday morning, the S&P500’s blended earnings growth rate, which includes actuals and estimates, is 90.5 percent this quarter. If the final growth rate for the second quarter is 90.5 percent, it will be the highest year-over-year earnings growth for the index since the fourth quarter of 2009.
“S&P500 EPS growth is expected to moderate next year as base effects from 2020 fade,” Barclays said in a note published on Sunday.
However, Barclays identified companies that its analysts believe will continue to see a significant increase in profits even as overall growth slows. These companies’ estimated earnings-per-share growth is in the top quartile of S&P 500 members for the current year — greater than 55 percent — and for the following year — greater than 16 percent.
From there, the firm narrowed the field to names with a market capitalization of at least $5 billion. The stocks that Barclays rates overweight have at least a 10% implied upside to their current price targets.
Square, a digital payments platform, has landed a spot on Barclays’ screen. In 2022, the company’s earnings are expected to increase by 40% year on year.
Square announced earlier this month that it would acquire Afterpay, a provider of buy-now-pay-later services, for $29 billion.
“For a couple years now, SQ management has increasingly discussed a longer-term goal to unite the Seller and Cash App ecosystems, and we believe the proposed Afterpay acquisition fits very well into that plan, given that part of the compelling value proposition of the pure-play buy-now-pay-later providers…is their two-sided network of consumers and merchants,” Ramsey El-Assal of Barclays said in an Aug.
Baker Hughes, an energy company, is on Barclays’ list of stocks with the highest expected EPS growth. Shares of the oilfield services company have been under pressure recently as oil prices have fallen; as of Monday morning, Baker Hughes stock was down about 15% in the previous three months.
“We see Baker’s shift into digital, decarbonization, and new energy as critical to its longer-term story, which isn’t being reflected in the stock price,” J. David Anderson of Barclays said in a July note.
The screen at Barclays is also made by the streaming behemoth Netflix. This year, the stock has underperformed the S&P500 and its Big Tech peers.
“Overall, with the most difficult [comparison] period behind it and 17$ underperformance vs. broader markets this year, we believe NFLX stock could start working again, especially with new elements to the story like video gaming, merchandizing, and buybacks,” Kannan Venkateshwar of Barclays said in a July note.
FedEx, Nike, and Pioneer Natural Resources are also on Barclays’ list.
Fisker stock
Morgan Stanley sees significant opportunity for investors in Fisker’s independent approach, which is forging its own path in the increasingly competitive electric car market.
Analyst Adam Jonas resumed coverage of Fisker with an overweight rating on Tuesday, saying in a client note that it is Morgan Stanley’s favorite electric vehicle company to go public during the boom in special purpose acquisition vehicles. Last October, the company went public for the first time.
The stock was up 10% in premarket trading Tuesday as a result of the Morgan Stanley call.
Fisker’s pitch is that it is focusing only on the parts of the development process that it excels at, allowing it to speed up production and form partnerships with more established manufacturers, according to Jonas.
“We see FSR as an EV design/engineering lab and consumer experience ‘architect’… a time-to-market accelerator for manufacturing powerhouses who need to get product to market as quickly and successfully as possible,”
Having to rely on relationships with other companies rather than manufacturing all of the parts could be a problem in the future, but Morgan Stanley believes the company is in a niche worth filling.
“The biggest pushback we hear on FSR is that they outsource too much to suppliers and thus don’t have as much of the secret sauce ‘in-house.’ While we agree that the vertically integrated platform players may be the big winners in the global EV arms race, there is room for other strategies,” the note said.
Jonas stated that he expects Fisker to begin production by November 2022, which would set it apart from other electric vehicle start-ups that have had to postpone their timelines.
