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Investing.com - UBS has lowered its price target on Six Flags (NYSE:SIX) Entertainment (NYSE:FUN) to $34.00 from $40.00 while maintaining a Buy rating on the stock. The theme park operator’s shares, currently trading at $25.66, have declined over 45% in the past six months, according to InvestingPro data.
The firm cited substantial weather disruption in the recent quarter that negatively impacted the theme park operator’s performance, along with disappointing expense management that showed significant cost deleveraging. InvestingPro analysis reveals concerning financial health indicators, with short-term obligations exceeding liquid assets and a current ratio of 0.52.
UBS believes the recovery timeline for Six Flags has shifted out to 2027-2028, compared to its previous estimate of 2026, though it maintains that the fundamental investment thesis remains intact.
The analysis noted potential headwinds including rising inflation, pressure on lower-end consumers, and immigration crackdown impacts on both demand and labor costs, while acknowledging that healthier wage growth and the industry’s position as an affordable entertainment option could support recovery.
UBS also highlighted that the recently announced CEO transition may drive investor focus on execution risks, particularly regarding revenue synergies from the merger that closed in July 2024 and overall performance heading into fiscal year 2026.
In other recent news, Six Flags Entertainment has been downgraded by S&P Global Ratings to ’BB-’ from ’BB’, with a negative outlook due to ongoing operational challenges. The company’s second-quarter performance was significantly below expectations, with a 9% drop in attendance, partly due to weather disruptions affecting nearly 20% of operating days. Despite these challenges, UBS has maintained its Buy rating and a $40 price target for Six Flags, attributing the weak results to weather issues and increased costs. Morgan Stanley (NYSE:MS), however, has lowered its price target to $30, citing a 20% reduction in the company’s 2025 EBITDA guidance. Guggenheim also reduced its price target to $43 following disappointing second-quarter results, where Six Flags reported $930 million in revenue against an expectation of $1,045 million. Additionally, Goldman Sachs has lowered its price target to $23, maintaining a Neutral rating and noting the company’s withdrawal of long-term guidance as indicative of structural challenges. These developments reflect a mixed outlook from analysts, with differing opinions on the company’s future performance.
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