Guggenheim raises United Parks price target to $72, maintains buy

On Thursday, Guggenheim analysts increased their price target on United Parks & Resorts (NYSE: PRKS) stock to $72 from the previous $70, while continuing to endorse the stock with a Buy rating. The adjustment comes following United Parks’ release of their fourth-quarter earnings, which slightly surpassed Guggenheim’s expectations.

The company reported fourth-quarter revenue of $384 million and adjusted EBITDA of $144 million. These figures were marginally higher than Guggenheim’s projections, which were $381 million for revenue and $142 million for adjusted EBITDA. The company maintains strong profitability with a healthy gross margin of 49% and has earned an overall "GOOD" Financial Health Score from InvestingPro, which offers comprehensive analysis through its Pro Research Reports covering 1,400+ US stocks. Despite the positive financial results, the quarter faced challenges due to adverse weather conditions, including Hurricanes Helene and Milton, which affected attendance by approximately 167,000 guests.

Analysts at Guggenheim acknowledged the impact of weather on the company’s performance, noting that the previous year saw a significant negative impact from several major hurricanes, totaling around 432,000 in lost attendance. This historical context sets the stage for potentially favorable comparisons in 2025.

Looking ahead, Guggenheim has modestly increased their revenue and EBITDA forecasts for United Parks for the year 2025. The new projections are $1.787 billion in revenue and $721 million in EBITDA. These projections are based on the expectation of more normalized weather conditions, slight increases in per capita spending, the introduction of new rides and attractions, and the continuation of cost management efforts.

The firm’s statement highlighted the factors contributing to the raised price target, emphasizing the potential for United Parks to benefit from improved circumstances and strategic initiatives in the coming year.

In other recent news, United Parks & Resorts announced its fourth-quarter 2024 earnings, revealing a mixed performance. The company reported revenues of $384.4 million, surpassing the expected $379.6 million, but missed earnings per share (EPS) forecasts, posting $0.50 against an anticipated $0.61. Despite this, United Parks remains optimistic about 2025, projecting record EBITDA assuming normal weather conditions. Analysts have responded to these developments with varied outlooks. Stifel raised its price target for United Parks to $74, maintaining a Buy rating, citing strong advance ticket sales and cost-saving initiatives. Meanwhile, JPMorgan increased its price target to $63, maintaining a Neutral rating, acknowledging the company’s revenue generation and cost management efforts. Mizuho (NYSE:MFG) also adjusted its price target to $45 but kept an Underperform rating, expressing concerns about elevated operating costs and skepticism over the benefits of planned cost reductions. These analyst assessments reflect a cautious optimism about United Parks’ future prospects amidst ongoing challenges and competitive pressures in the theme park industry.

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