Shares of AMC Entertainment (AMC - Get Report) jumped more than 10% Monday after an analyst at B. Riley FBR upgraded the company to a buy from neutral amid what he sees as strong demand for "Avengers: Endgame" tickets, and more confidence in the company's subscription program.
"We believe the impressive advance ticket sales for 'Avengers: Endgame' signals the start of the spring/summer period and we are increasingly optimistic around the potential contribution of Stubs A-List with our updated analysis after meeting with management at CinemaCon last week," B. Riley analyst Eric Wold wrote in the research note to clients.
Wold noted that the company's Stubs A-List program, which allows moviegoers to see up to three films per week, appears to have significant upside.
"Knowing the significant traction that was originally achieved with MoviePass before the parent company's financial issues and terms of service changes, we saw an opportunity for one of the major exhibition chains to step in and offer movie-goers a substitute plan," Wold said.
"And with Regal not yet introducing a subscription program following its acquisition by Cineworld over a year ago, our channel checks have indicated a share shift within shared AMC and Regal film markets, which we would expect to continue until at least another plan is introduced," he noted.
AMC shares were up more than 7%, or $1.12 at $16.10 in mid-afternoon trading on the New York Stock Exchange. The company last month reported earnings that beat analysts' forecasts, sending shares surging more than 17%.