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Investing.com - Mizuho (NYSE:MFG) has reduced its price target on Six Flags (NYSE:SIX) Entertainment (NYSE:FUN) to $36.00 from $43.00 while maintaining an Outperform rating on the stock. According to InvestingPro analysis, the stock appears undervalued at its current price of $29.44, with analysts setting targets ranging from $33 to $60.
The price target adjustment comes as Six Flags has become the worst-performing stock in Mizuho’s coverage universe, declining more than 40% year-to-date compared to the S&P 500’s 7% gain.
Mizuho attributes the stock’s weakness largely to perceived soft attendance figures, a thesis supported by weak third-party foot-traffic data, which suggests attendance in the second quarter could be down 10% year-over-year despite April attendance being slightly above 1% year-over-year.
The research firm notes that the market has determined Six Flags is a "broken business" given the magnitude of the data and volume decline, but Mizuho finds it "perplexing why the business would suddenly break."
Mizuho believes weather is a "larger than appreciated variable" affecting attendance figures, noting that such a rapid deceleration would be difficult to achieve if it were solely due to management decisions.
In other recent news, Six Flags Entertainment has faced several challenges impacting its financial outlook. UBS has lowered its price target for Six Flags to $40 from $49, citing weaker attendance due to adverse weather conditions during critical periods, including June and the July 4th weekend. The firm expects Six Flags to report EBITDA below consensus numbers for the second quarter, potentially leading to a revision of the company’s full-year EBITDA guidance. Similarly, Guggenheim reduced its price target to $48 from $50, also due to weather-related challenges affecting attendance and season pass sales. Guggenheim now projects full-year EBITDA of $1.081 billion, at the low end of management’s guidance range.
S&P Global Ratings revised Six Flags’ credit outlook to negative, highlighting weaker-than-expected operating performance and delayed debt reduction. The agency expects the company’s adjusted leverage to remain above its downgrade threshold through at least 2025. Despite these challenges, Oppenheimer maintained its Outperform rating with a $60 price target, noting that the majority of annual attendance has yet to occur. UBS also maintained a Buy rating with a $49 price target, although its projections for EBITDA growth and margins are more conservative than the company’s targets. These developments underscore the ongoing operational and financial challenges Six Flags faces amid adverse weather conditions and strategic execution.
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