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Research firm raises price target on AMC stock, but still thinks it's dropping to $7.50

Adam Aron, AMC Entertainment president and CEO.
David Orrell | CNBC

Research firm Wedbush raised its 12-month price target on shares of AMC Entertainment on Friday ... by $1.

As AMC's stock nearly doubled this week to $51 riding a wave of enthusiasm from Reddit posters, Wedbush took its price target to $7.50 from $6.50. That would still entail an 85% plunge.

"AMC has made the best of its current 'Meme Stock' status by selling shares at a premium, and has raised significant capital doing so," Wedbush analyst Alicia Reese said in a note.

"Should AMC use its current cash balance to meaningfully reduce its debt and create earnings growth opportunities, we could envision a justified price target as high as $10," Reese said.

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