The meme stock buzz is back, and stocks such as AMC Entertainment (NYSE: AMC) are rallying again, rewarding investors that have held long for months. The stock surged 19.6%, and in the past month, the AMC has gained 66%.
Reddit/WallStreetBets driving AMC’s rally again
AMC’s gain not only comes from the fervor of Reddit/WallStreetBets that have been driving “meme stocks” but also from increasing optimism that better days are coming for the theatre business. On Twitter AMC was trending with hashtags “#AMCSTRONG” “#AMC500K” and “#AMCSqueeze.” The latest course in the stock follows the massive surge at the end of January, which saw the stock hit a 52-week high of $20.36 before plunging a week later.
Just like the rally at the start of the year for “meme stocks,” there is no singular catalyst driving the latest rally. According to analysts, the surge is likely due to cross-current factors that have triggered piling in of traders. There has been much steam for cryptocurrencies this month, and most traders are re-entering the stock market to look for more gains. Most importantly, Reddit/WallStreetBets forum continues to offer enthusiasm for meme stocks.
Riley downgraded AMC from “Buy” to “Neutral” rating
Vanda Research macro strategist Viraj Patel said that we have seen side-lined things in the past month, but it is picking back up again. VandaTrack data shows that investors put over b$22 million into AMX on Tuesday, almost double the stock’s daily average of $9 million.
Riley downgraded the stock to Neutral from Buy with a price target of $16, citing that AMC’s valuation has gotten far from its intrinsic value. However, the research firm is confident in MAC’s 2022/23 box recovery and chance to pick more market share.