The movie-theater chain and original meme stock reported better-than-expected fourth-quarter results this week On the back of its fourth-quarter earnings results this week, AMC Entertainment Holdings Inc. is “hamstrung” by its high level of debt and rent obligations, according a Macquarie analyst.

“AMC remains hamstrung by high leverage with interest (>$300m) and deferred rent (~$100m),” wrote Macquarie’s Chad Beynon in a note released Thursday. Also citing the current business outlook, Macquarie maintained its underperform rating for AMC AMC, +1.74%, while lowering its price target to $4 from $5.

Of six analysts surveyed by FactSet, three have a hold rating and three have a sell rating on the stock.

Related: AMC delivers revenue beat helped by Taylor Swift and Beyoncé, yet stock drops

Since the start of 2023, AMC has repaid $101 million of deferred rent, the company said when reporting its results this week. The movie-theater chain’s deferred-rent balance at the end of 2023 was $56.3 million, which it plans to reduce by another approximately $20 million by the end of 2024.

In its note, Macquarie cited concerns as the movie-theater industry continues its postpandemic recovery. “Theatrical stocks underperformed in ’23 after a very difficult ‘22 and remain ~60% off of prepandemic levels,” wrote Beynon. “Unfortunately, the outlook for ‘24 has questions again following the Hollywood strikes and slower postpandemic core demand.”

Yet Macquarie believes that revenues should improve beyond the first quarter. “Bottom line: We’re taking a conservative approach toward our estimates but believe there could be upside opportunities in 2H24,” Beynon added.

Related: AMC rode the Taylor Swift and Beyoncé wave, but a ‘bumpy 2024’ is now under way, Wedbush says

AMC’s fourth-quarter results were boosted by the performance of Taylor Swift and Beyoncé’s concert films. Speaking during AMC’s conference call to discuss the results, Chief Executive Adam Aron said the company is in touch with other “world-class musical artists” for movies of their own in 2024 and 2025.

Aron also acknowledged that 2023 did not live up to its full potential, citing the months of writers and actors strikes that “crippled” Hollywood. But he said that the box office will continue to strengthen, adding that 2025 could be “a gangbuster year,” both for the industry and AMC as a company.