Six Flags stock holds Buy rating at UBS despite weak Q2 results

Published 07/08/2025, 16:32
Six Flags stock holds Buy rating at UBS despite weak Q2 results

Investing.com - UBS maintained its Buy rating and $40.00 price target on Six Flags (NYSE:SIX) Entertainment (NYSE:FUN), currently trading at $24.36 with a market capitalization of $2.44 billion, despite the theme park operator reporting second-quarter results below expectations.

The weaker-than-anticipated performance was attributed to excessive weather disruptions and the pull-forward of costs from the second half of the year into Q2. Six Flags management cited delayed pass purchases and pressure on value-conscious lower-end consumers as additional factors affecting performance. According to InvestingPro data, the stock’s RSI suggests oversold conditions, while 5 analysts have recently revised their earnings expectations downward.

UBS noted encouraging signs of recovery in July, with visitation increasing 8% over the past two weeks, 4% over a four-week period, and 1% over a five-week period. These improvements may be partially attributed to easier year-over-year comparisons due to hurricane impacts last year and pent-up demand following early summer weather disruptions.

July typically contributes approximately 40% of Six Flags’ full-year EBITDA versus Q2, making it a crucial period for the company’s annual performance. Management expects a 3% decline in per capita spending to continue through the remainder of the year.

Six Flags’ guidance implies a revenue decline of around 2% in the second half of the year, split evenly between Q3 and Q4, potentially leaving room for outperformance if the recent four-week attendance trend of 4% growth continues through the rest of summer. The company’s last twelve months revenue stands at $3.17 billion, with an EBITDA of $714 million. InvestingPro subscribers have access to 10+ additional exclusive insights and comprehensive analysis about Six Flags’ financial health and growth prospects.

In other recent news, Six Flags Entertainment reported its second-quarter 2025 earnings, revealing a significant miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.99, which fell short of the expected $1.03, and reported revenue of $930 million, missing the forecast of $1.03 billion. Following these results, several investment firms adjusted their outlooks on Six Flags. Morgan Stanley (NYSE:MS) reduced its price target to $30, citing a 20% reduction in the company’s 2025 EBITDA guidance while maintaining an Overweight rating. Guggenheim also lowered its price target to $43, maintaining a Buy rating, after Six Flags’ revenue and adjusted EBITDA fell short of expectations. Goldman Sachs decreased its target to $23, maintaining a Neutral rating, pointing to structural challenges and the withdrawal of long-term guidance as concerns. Additionally, Jefferies downgraded Six Flags from Buy to Hold, cutting its price target to $25, due to leadership uncertainty and a significant earnings miss. These developments highlight the challenges Six Flags faces in meeting financial expectations and addressing market concerns.

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