Despite the current Covid-19 surge, plan on seeing more theater-first and theater-only releases in 2022. That should bode well for companies like AMC Entertainment (NYSE:AMC), which have had a mixed finish to 2021. While AMC stock enjoyed an explosive rally this summer, the stock has fallen 60% from its high and has declined 25% over the past three months.
Despite the intense volatility of the last few quarters, share are still up more than 1,000% so far this year. Yet, it’s clear that AMC stock could benefit from a return to normal.
How? Since the end of 2020, we’ve seen many more at-home movie release options.
During that time, AT&T’s (NYSE:T) Warner Bros. announced that all of its 2021 releases would be available on HBO Max. It’s not that cinema releases were off the table, but at the time it was hard to know what the Covid-19 climate would be like.
This brought the start of more hybrid movie releases. One could argue that this was a win-win for the consumer and the film producer. Provided the company has a well-known streaming app — in this case, it did with HBO Max — film makers could dip into both markets.
Consumers who didn’t like going to the movies even before the pandemic could enjoy new releases right at home. Those who like going to the movies could still enjoy an in-theater experience.
The only obvious loser in a situation like this is the theater. That said, 2022 should be a much better year for AMC, Imax (NYSE:IMAX) and others as the industry shifts back to its norms.
2022 and AMC Stock
Going into the new year, Shawn Robbins, the chief analyst at Box Office Pro, told Yahoo Finance that Warner Bros. will be going back to its 45-day theatrical model.
The analyst stated that, “Statistically, the most frequent consumers of streaming also tend to be the most frequent moviegoers. It really comes down to the fact that whoever is watching the content wants to see it where it’s available.”
That follows Disney (NYSE:DIS), which had already gone back to a theater-first release model back in September.
In the near term, “we’re going to be living in a world where you have mainly the big blockbusters, franchise films, and superhero films being the bread and butter for the industry,” Comscore’s Paul Dergarabedian said.
While there are still questions regarding the valuation of AMC stock, a return to box-office traffic will be a welcomed development. Maybe it will even help increase Wall Street’s revenue estimates for the company next year.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.