AMC( AMC, $2.60) shares downgraded by Loop Capital, on bankruptcy possibility

AMC Entertainment shares  got a rating downgrade  from analysts at Loop Capital, who  feel there’s an increased possibility of the theater chain filing bankruptcy claims.

Loop Capital’s Alan Gould lowered rating on AMC to sell from hold.  Gould also slashed his price target on the stock to $1 a share (from $4) – which  represents 68% downside from the stock's Tuesday closing price. 

In mid-March, AMC shut 1,000 of its theaters with some 11,000 screens , for six to 12 weeks. It recently told landlords that it will stop paying rent. 

In April, The Wall Street Journal,  citing people familiar with the matter, reported that lenders to AMC had sought services of the law firm of Gibson, Dunn & Crutcher for advice on expected restructuring discussions.

Gould projected negative cash flow of -$285 million in the first half of the year for AMC, and indicated that  the coronavirus crisis could lead to some liquidity issues at the company.