Stifel cuts United Parks stock price target to $60, maintains Buy rating

On Friday, Stifel analysts adjusted their outlook for United Parks & Resorts (NYSE: PRKS), reducing the price target from $74.00 to $60.00, yet reaffirming a Buy rating on the company's shares. The revision comes amidst concerns about a potential moderate recession and its impact on the theme park industry.

Stifel analysts believe that the current market conditions and the recent decline in United Parks & Resorts' share price have led to an overreaction by investors. Their assessment suggests that the market has factored in a near worst-case scenario for the company, with considerable fears surrounding consumer spending and economic health.

The analysts noted that the theme park industry has historically shown resilience in the face of economic downturns. They cited the performance of United Parks & Resorts during the Global Financial Crisis (GFC), where the company experienced a 7% drop in attendance, a 10% fall in revenues, and a 15% decline in EBITDA. Stifel's analysis indicates that similar declines have already been accounted for in the current share price.

Moreover, Stifel anticipates that United Parks & Resorts' strong free cash flow (FCF) generation, estimated at an 11% yield on 2027 projections, will provide a stable support for the stock. This expectation is based on the company's ability to maintain financial health and potentially weather economic challenges.

The firm's maintained Buy rating reflects their confidence in United Parks & Resorts' long-term prospects, despite the short-term economic headwinds and market volatility. Stifel's adjusted price target of $60.00 represents their current valuation of the company's shares in light of the revised economic assumptions.

In other recent news, Six Flags (NYSE:SIX) Entertainment has received a Buy rating from UBS, with a price target set at $49. UBS's analysis indicates that Six Flags could see significant growth, projecting a fiscal year 2026 EBITDA of $1.20 billion. The firm highlights potential revenue synergies from a merger, estimating an additional $125-$130 million on top of the previously announced $80 million. Meanwhile, United Parks & Resorts has been the focus of several analyst updates following their financial performance. Guggenheim has raised its price target for United Parks to $72, maintaining a Buy rating after the company's fourth-quarter revenue of $384 million and adjusted EBITDA of $144 million exceeded expectations.

Mizuho (NYSE:MFG) Securities also adjusted its price target for United Parks to $45, keeping an Underperform rating, noting concerns about operating costs despite positive attendance figures. Stifel analysts increased their price target to $74, reaffirming a Buy rating, citing strong advance ticket sales and cost savings. Barclays (LON:BARC) initiated coverage of United Parks with an Equalweight rating and a $50 price target, expressing caution due to competitive pressures from Universal's new Epic theme park. These developments underscore the ongoing interest and varied perspectives on the financial prospects of Six Flags and United Parks & Resorts.

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