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On Wednesday, Jefferies analyst David Katz adjusted the price target for Six Flags (NYSE:SIX) Entertainment (NYSE: FUN) stock, increasing it slightly to $42.00 from the previous $41.00, representing a potential 15.6% upside from the current price of $36.33. The firm continues to recommend a Buy rating on the stock. According to InvestingPro data, the company appears slightly undervalued based on its Fair Value analysis. Katz’s assessment followed Six Flags’ investor day, where the company set ambitious targets for the coming years.
Six Flags’ management presented its financial goals for the period up to 2028, aiming for compound annual growth rates (CAGRs) of approximately 6% for revenue, around 10% for adjusted EBITDA, and nearly 44% for adjusted free cash flow (Adj. FCF). These projections build on the company’s impressive 54.72% revenue growth in the last twelve months and current EBITDA of $704.68 million. These projections are based on an anticipated attendance figure of 58 million by the fiscal year 2028, which would represent a 3.5% CAGR. InvestingPro subscribers can access 8 additional key insights about Six Flags’ growth potential and financial health.
The company’s strategy was described by Katz as a "prove-it story," with particular emphasis on the second quarter and second half of 2025 as pivotal moments for demonstrating progress. Six Flags’ management also outlined a path to reduce its leverage to less than four times by the end of 2026, a significant improvement from the current debt-to-equity ratio of 2.99x and concerning current ratio of 0.37. Katz noted this as a crucial factor for the stock’s valuation to align with historical EBITDA multiples, which have ranged between 7.8 to 11 times.
Six Flags’ focus on cash generation was highlighted as a key element in achieving these leverage targets. The company’s current leverage stands at 6.8 times its forecasted 2026 EBITDA, suggesting a potential for normalization if the targets are met.
The analyst’s comments and the new price target reflect confidence in Six Flags’ strategic plan and its ability to achieve the outlined financial objectives. The company’s investor day has thus provided a clearer framework for investors to gauge the future performance and potential of Six Flags Entertainment stock.
In other recent news, Six Flags Entertainment has seen several adjustments in its stock price targets and ratings from major financial firms. Stifel analysts have lowered their price target for Six Flags from $52.00 to $48.00, maintaining a Buy rating. This adjustment comes amid concerns over the company’s first-quarter performance for 2025, but Stifel remains optimistic about the company’s prospects, citing strong season pass metrics. Meanwhile, JPMorgan has significantly reduced its price target for Six Flags to $28.00 from $46.00, while maintaining an Underweight rating. They noted potential challenges in regaining attendance and pressures on pricing, alongside concerns about the company’s elevated cost structure and capital expenditure needs.
Jefferies also adjusted their outlook, reducing the price target to $42.00 from $58.00, yet retaining a Buy rating. The firm highlighted the impact of schedule changes for the Boysenberry festival and investments in legacy assets, which are expected to affect first-quarter performance but potentially boost the second quarter. Despite these adjustments, Jefferies remains optimistic about Six Flags’ long-term value proposition. These recent developments reflect varying perspectives on Six Flags’ financial outlook and operational strategies, as analysts assess the company’s ability to navigate current market conditions and economic uncertainties.
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