Stifel raises United Parks & Resorts target to $74, maintains Buy

On Wednesday, Stifel analysts adjusted their outlook on United Parks & Resorts (NYSE: PRKS), increasing the price target from $70.00 to $74.00, while reaffirming a Buy rating on the company’s stock. The move comes as the analysts believe the theme park operator is undervalued and poised for growth, despite a tough start to the first quarter of 2025 due to weather-related issues and competition from Universal’s new Epic park opening in May.

The Stifel analysts pointed to several positive indicators for United Parks & Resorts, including advance ticket sales, season and group sales, and international bookings, all of which are tracking ahead of last year by double digits. Additionally, the company has identified $50 million in cost savings, which are expected to be largely realized within the current year.

According to the analysts, the current share price reflects concerns over potential competition affecting visitor numbers and spending patterns at United Parks & Resorts’ parks. However, they argue that the company’s value proposition and high-quality assets should provide a level of insulation against these competitive pressures.

The revised EBITDA estimate for United Parks & Resorts in 2025 stands at $693 million, which Stifel considers to be a conservative figure. They suggest that the actual EBITDA could approach $730 million. The analysts’ commentary underscores a belief in the company’s ability to outperform expectations and achieve record EBITDA this year, despite the challenges faced in the early part of the quarter.

Shares of United Parks & Resorts traded lower on Wednesday following the update, indicating that investors may need more convincing regarding the company’s potential to reach these financial targets. Stifel’s analysis, however, suggests that the current share price offers an attractive entry point for investors, given the projected earnings and identified cost savings.

In other recent news, United Parks & Resorts reported mixed results for their fourth-quarter 2024 earnings. The company fell short of earnings per share (EPS) expectations, posting $0.50 against a forecasted $0.61, but managed to surpass revenue estimates with $384.4 million compared to the anticipated $379.6 million. Despite the EPS miss, the company remains optimistic about future growth, supported by strategic initiatives and new attractions. Forward guidance suggests record EBITDA in 2025, with cost efficiency initiatives expected to save $50 million. Meanwhile, JPMorgan raised United Parks’ price target to $63, maintaining a Neutral rating, reflecting the company’s strong revenue generation and cost management. However, challenges remain as international visitation lags behind pre-pandemic levels, and competition from other leisure activities continues to impact market share. The company also repurchased 9.4 million shares, emphasizing its commitment to returning excess cash to shareholders.

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