Analysts are upbeat on AMC Entertainment Holdings Inc. after the company’s Wednesday announcement that it would be launching a movie subscription service, its response to MoviePass.

Benchmark raised its rating for AMC AMC, -2.51% to buy from hold, and set an initial price target of $20. The new subscription service “somewhat offsets our concerns over secular pressure on attendance trends,” wrote Benchmark analyst Mike Hickey, adding that he thinks the new subscription service will drive up theater attendance and earnings.

On Tuesday, AMC will begin offering guests the option of seeing three movies per week for a monthly fee of $19.95. The subscription service, dubbed AMC Stubs A-List, will be offered through its loyalty program AMC Stubs. A-List will be a formidable opponent to MoviePass, whose majority owner is Helios & Matheson Analytics Inc. HMNY, -20.00% MoviePass allows customers to see one movie a day for a monthly fee of $9.99, but can only be used for 2D films. Customers of AMC’s A-List will have the option to watch movies in premium formats like IMAX, Dolby Cinema and RealD.

Read:How AMC’s new subscription service compares to MoviePass and its competitors

Adding to Benchmark’s positive outlook for AMC: A potential IPO of the company’s European assets in 2019, an injection of $440 million in cash from selling non-strategic assets and valuation support from its quarterly dividend yield of 4.8%.

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MKM Partners has set its 12-month price target at $25, and is maintaining its buy rating. MKM analyst Eric Handler called the AMC offering “an attractive service which further increases moviegoer value options.”

Although “rollout and marketing will carry up-front costs,” the subscription service has “solid return potential,” he wrote. AMC has said that every one million subscribers may drive earnings of $15 million to $25 million, Handler wrote. He predicts the initial subscriber base will likely come from Stubs members, which now total around 15 million households—a significant potential haul.

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William Blair maintained its market outperform rating, saying that while the subscription is “priced at a premium to competitive subscription models, A-List includes the industry’s broadest range of benefits.”