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On Thursday, analysts at Jefferies adjusted their outlook on Six Flags (NYSE:SIX) Entertainment (NYSE: FUN), reducing the price target from $58.00 to $42.00 while reaffirming a Buy rating on the company's stock. The revision reflects changes in the near-term operating trends anticipated for the first and second quarters of 2025. According to InvestingPro data, the stock currently trades at $33.57, significantly below its 52-week high of $58.70, with analysts maintaining an average price target that suggests over 50% upside potential.
The analysts noted that Six Flags is shifting the schedule of its popular Boysenberry festival at Knotts from the first quarter to the second quarter compared to the previous year. This move is expected to have a negative impact on the company's first-quarter performance but could potentially provide a boost during the second quarter. The company's next earnings report is scheduled for May 7, 2025, which will provide more clarity on the impact of these scheduling changes.
In preparation for the upcoming second-quarter season, Six Flags has also invested in updating its legacy assets. These investments are likely to create a financial drag in the first quarter; however, they are projected to contribute positively in the following quarter. The strategic positioning of these investments is aimed at enhancing the visitor experience and overall park offerings.
Despite the current low visibility on macroeconomic conditions, Jefferies remains optimistic about the long-term value proposition of Six Flags. The firm's analysts believe that the company's ongoing transition holds considerable value for investors, which is reflected in the reiterated Buy rating. InvestingPro analysis reveals several positive indicators, including expected net income growth and sales growth for the current year. Subscribers to InvestingPro can access additional insights through the comprehensive Pro Research Report, which provides detailed analysis of Six Flags' financial health, valuation metrics, and growth prospects among 1,400+ top stocks.
The price target adjustment by Jefferies is based on a reassessment of Six Flags' near-term financial projections, taking into account the timing of events and investment in infrastructure. The company's stock price will continue to be monitored as these operational changes unfold over the coming quarters.
In other recent news, Six Flags Entertainment reported fourth-quarter revenue of $687 million and a modified EBITDA of $209 million, slightly missing Guggenheim's expectations. Despite the shortfall, Six Flags management remains optimistic, projecting adjusted EBITDA between $1.08 billion and $1.12 billion for 2025. Mizuho (NYSE:MFG) Securities adjusted its price target for Six Flags to $49, maintaining an Outperform rating, citing mixed performance in its legacy businesses and cost-saving measures. Barclays (LON:BARC) initiated coverage on Six Flags with an Overweight rating and a $41 price target, emphasizing the company's capital investments and operational strengths. Meanwhile, Six Flags announced the nomination of four new board members, aiming to enhance strategic objectives and shareholder value.
United Parks & Resorts received a Neutral rating from UBS, with a price target of $49, due to concerns about potential declines in EBITDA and challenges in maintaining historical valuation multiples. UBS highlighted a possible decrease in visitation numbers and difficulties in boosting per capita spending. The firm's analysis contrasts with more optimistic market views, which foresee a 3% annual growth rate in EBITDA leading into FY'26. UBS projects a more conservative outlook, anticipating flat or slightly declining EBITDA. These developments provide investors with a snapshot of the current landscape for both companies, highlighting key financial and strategic considerations.
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