To arrive at our target price of $2.30, we value AMC at ~6.5x 2026 EV- Adj. EBITDA. Given the firm's elevated leverage and the proliferation of streaming services over the past few years, our target multiple is at a discount to the firm's 3-year average NTM EBITDA multiple prior to the pandemic.

We believe the following factors are key risks to AMC exceeding our target price: 1) the company is able to reduce more expenses and/or capex to sustain cash flow; 2) attendance recovers faster than we expect; 3) the box office is stronger than we expect; and 4) AMC is able to raise incremental capital and reduce leverage ahead of our expectations.