AMC – Market expectations are for Uniform ROA to expand, but management is concerned about capital allocation, attendance, and compensation
April 3, 2020
- AMC Entertainment Holdings, Inc. (AMC:USA) currently trades above corporate averages relative to Uniform earnings, with a 56.2x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management is concerned about their capital allocation strategy, theatre attendance, and executive compensation
- Moreover, management may lack confidence in
their ability to effectively liquidate assets for their deleveraging strategy. In
addition, they may have concerns about the effectiveness of the changes in
management compensation and about the sufficiency of their liquidity position. Furthermore, they may lack confidence in
their ability to entice moviegoers to get out of the house by adding to the theater
experience, and they may be downplaying changes related to the popularity of
theatergoing. Moreover, they may lack confidence in their ability to sustain
increasing
attendance, and may be downplaying concerns about the economic impact of closed
Italian theaters
