Sign InAMC stock shows signs of high volatility and bearish outlook, experts recommend sell
Summary
On August 29, 2023, AMC Entertainment Holdings, Inc. stock decreased by 1.45% and exhibited high volatility, trading at $10.91 with a significantly higher volume of 54.40 million shares, indicating potential minor correction but an overall bearish outlook due to negative sentiment, negative PE ratio, and tough financial conditions, leading analysts to recommend selling the stock.
Overview
The company in focus is AMC Entertainment Holdings, Inc. (Ticker: AMC) which is listed on the NYSE exchange. As of the close on August 29, 2023, the stock was priced at $10.91, which represents a 1.45% decrease from the previous close.
Volume and Volatility
The stock saw a volume of 54.40 million shares, which is significantly higher than the average volume of 5.52 million shares, indicating heightened trading activity. Given the average true range (ATR) of 40.44, the stock demonstrates signs of high volatility.
Prices and Moving Averages
During the last trading session, the stock swung between a low of $10.72 and a high of $11.7, with no support level and a resistance level at $11.07. Over the course of the year, the stock has traded between $10.72 and $94.85, pointing to a significant drop from the year's high. Additionally, the recent closing price of $10.91 is largely below both the 50-day moving average ($36.48) and the 200-day moving average ($44.38), indicating a downtrend.
Market Cap and Ratios
AMC has a market cap of $0.75 billion while the EPS stands at -$5.65, resulting in a PE ratio of -2.25. This negative PE indicates that the company is going through a tough financial period with no current earnings.
RSI and MACD
The Relative Strength Index (RSI) is currently at 18, suggesting that the stock may be oversold. The MACD of -5.75 over the past 3 months also indicates bearish momentum for the company's stock.
Analyst Opinion and Price Targets
Analysts' opinions lean towards 'sell', with three recommending a sell, two stating to hold, and only one each recommending a strong buy and buy. The consensus price target is $19, signifying that there is potential upside.
News Sentiment
The news sentiment seems negative as there's continuous coverage of AMC's APE unit conversion into common shares causing a drop in stock price. Also, it raised concerns about the suspension of APE from the New York Stock Exchange, which added uncertainty to the trading environment.
Earnings Announcement
The next earnings announcement is expected to be released on November 6, 2023. This could potentially lead to additional volatility in the stock price, depending on the company's reported financial performance.
Future Prediction and Recommendation
Given the oversold condition of the stock suggested by the RSI and the recent drop in the stock price, we may witness a minor correction in the next trading day rising towards the resistance level of $11.07. However, considering the overall market response after the APE conversions and the existing financial conditions evident from the negative PE ratio, the outlook for the coming week seems bearish.
The Discounted Cash Flow (DCF) suggests a fair value of $13.33 per share, which is higher than the current market price. However, given the negative sentiment, high volatility, and current financial conditions, the analysts' recommendation of 'sell' seems to align better. Therefore, it is currently suggested to categorize AMC stock as a Sell. Future investment decisions should consider the company's financial performance in the forthcoming earnings announcement and the impact of ongoing events related to the APE conversion.
