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On Monday, BofA Securities analyst Shaun Kelley revised the price target for Vail Resorts (NYSE:MTN) stock, decreasing it to $160 from the previous $185, while keeping a Neutral rating on the shares. The revision comes as the stock trades near its 52-week low of $129.85, having declined 25.14% year-to-date. According to InvestingPro analysis, the stock appears undervalued at current levels, with 5 analysts recently revising their earnings expectations downward. Kelley’s assessment comes ahead of Vail Resorts’ expected report on late-season ski metrics, which is anticipated this week or the week of April 28.
The analyst reflected on the company’s earlier report, which showed a 2.5% decline in skier visits up to March 2, with an expectation of improved visitation in March and April. However, Kelley noted that updated data indicates a further decline, with season-to-date visitation now down 3.6%. The data does not encompass Easter, and while an uptick is expected, concerns remain. Despite these challenges, InvestingPro data shows the company maintains a solid 44.5% gross profit margin and offers a significant 6.41% dividend yield. Get access to 10+ additional ProTips and comprehensive financial metrics with an InvestingPro subscription. Kelley pointed to factors such as a lackluster March, fewer open terrains compared to last year (32% versus 55%), Inntopia data, and broader economic uncertainties as potential contributors to weaker than anticipated results for the late season and Easter period.
In light of these factors, Kelley suggested that Vail Resorts may trend towards the lower end of their fiscal year 2025 Resort EBITDA guidance, which ranges from $841 million to $877 million. Consequently, the analyst has adjusted the fiscal year 2025 Resort EBITDA estimate to $845 million, down from the prior $854 million.
To mitigate potential impacts, Vail Resorts could benefit from the lower number of terrain openings compared to last year and by accelerating planned cost initiatives. The revised price objective of $160 is based on a 10.5 times multiple of the projected 2025 EBITDA, a reduction from the earlier 11.0 times multiple, reflecting the new estimates and market revaluation.
In other recent news, Vail Resorts has reported significant financial results and adjustments. The company has exceeded earnings expectations for two consecutive quarters, as highlighted by Truist Securities, which maintained a Buy rating and a $247 price target. Truist noted that despite foreign exchange headwinds, Vail Resorts’ ability to outperform market expectations has reinforced confidence in its stock. Stifel also maintained a Buy rating with a $217 target, citing a modest 2% increase in Resort Adjusted EBITDA and stable booking trends. Meanwhile, Jefferies adjusted its price target to $173, maintaining a Hold rating due to concerns over weather unpredictability affecting third-quarter volumes. Mizuho (NYSE:MFG) Securities reduced its price target to $215 but kept an Outperform rating, acknowledging strong EBITDA results despite a slowdown in February visitation. The firm’s analysis suggests a potential downturn in skier visits in the upcoming quarter. These developments reflect a mix of optimism and caution among analysts regarding Vail Resorts’ financial performance and future prospects.
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