MKM Partners analyst Eric Handler has upgraded stock of AMC Entertainment Holdings from sell to neutral, citing reduced risk of bankruptcy.

“Near-term bankruptcy risk appears to have subsided,” the analyst wrote in a note to clients on Wednesday. He said the lower risk is due to “the combination of (1) the increasing likelihood movie theaters in the U.S. and Europe will be able to re-open with new Hollywood content in the July/August time frame; and (2) the company’s improved liquidity position.”

Handler raised his price target for the stock from $1 to $5. AMC shares gained 9.6% in trading on Wednesday to close its $5.60 a share on the New York Stock Exchange. It was the highest close since early March.

The analyst pointed to Warner Bros.’ launch of a trailer for Christopher Nolan’s “Tenet” as a positive sign. The action movie is still scheduled to his theatres on July 17.

“The gradual re-opening of the economies in the U.S. and Europe already allows for theatres in some markets to resume business operations. AMC has stated it will not reopen until there is new content to be shown. In our view, last week’s launch of the new trailer for ‘Tenet’ was a step in the right direction showing Warner Bros. is feeling comfortable enough with a sufficient number of markets to be open in mid-July (or soon after) to start allocating marketing dollars to the opening of this film.”

“We were also pleased to see last week’s announcement that Los Angeles County has set a target date of July 4 for a reopening of all businesses. Similar announcements from the municipal governments in New York City and/or Chicago (the country’s first and third largest markets, respectively) would provide additional certainty to the view that new feature film content could be available by mid-July,” Handler said.

In mid-April, amid the prospect of staying shut for several more months due to the coronavirus pandemic, AMC Entertainment unveiled plans to raise $500 million in new debt to improve its balance sheet. It said at the time that the funds from the senior notes offering, which will have to be repaid in 2025, should be enough to keep the company going until the middle of the summer.

Handler noted that the debt raised had shored up the balance sheet. He added, “We remain concerned with AMC’s overall debt load of $5.35 billion and annual interest payments, which we believe are approaching $350 million.”

AMC, which is controlled by China conglomerate Dalian Wanda Group, shuttered its 632 North American locations in March and furloughed or laid off more than 26,000 employees.