AMC Entertainment Holdings shares fell 2.6 % on Thursday after Wedbush analyst Michael Pachter downgraded the company.

Pachter downgraded the stock from neutral to underperform while maintaining the $7.50 price target.AMC Issues $500M In Debt To Stay Liquid; Shares Spike On U.S. Reopening  Plan – Deadline

The analyst believes that the current $7.50 price target "generously" values the company, prompting the reduction

Pachter stated in an investment note that the "ultimate majority of retail ownership will eventually cash out and move on."

However, the analyst is optimistic about the entire sector, noting that movie theatre attendance began to rise in the third quarter as top-tier movies returned to the calendar. He also stated that the fourth quarter box office sales have been positive thus far.

As of mid-morning, the shares of the American movie theatre company were trading around $39.72.