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On Wednesday, Pursuit Attractions and Hospitality (NYSE: PRSU) received a Buy rating from Stifel analysts, who set a price target of $38.00 for the company’s shares. Currently trading at $27.66, the stock sits near its 52-week low of $26.66, with analyst targets ranging from $40 to $41. The initiation of coverage comes after the sale of GES, positioning Pursuit Attractions as a pure-play entity in the hospitality industry, centered around high-value, iconic destinations.
The analysts underscored Pursuit’s advantageous position, noting its pricing power supported by secular demand tailwinds and significant regulatory constraints that limit the growth of supply. With impressive revenue growth of 189% in the last twelve months and a moderate debt-to-equity ratio of 0.24, they anticipate an attractive outlook for organic growth, bolstered by a multi-year capital expenditure plan with more than four years of projects already identified.
The firm’s expansive total addressable market (TAM), strong market position, and a healthy balance sheet are seen as key factors that could enable accretive mergers and acquisitions. Stifel’s analysis also points to Pursuit’s economic resilience, which has been evident through its ability to benefit from consumer trade-downs, as well as the current geopolitical climate that favors the company’s Canadian assets.
Stifel’s commentary highlighted that, despite the potential impact of consumer softness and foreign exchange volatility, Pursuit’s business model has shown durability. The analysts believe that the company’s valuation is attractive when compared to other sectors within the gaming, lodging, and leisure industries, especially when adjusted for growth. According to InvestingPro analysis, the stock appears slightly overvalued at current levels, though net income is expected to grow this year. They also suggest that the recent sale of GES and increasing investor familiarity with Pursuit’s business could lead to a re-rating of the company’s stock multiple. For deeper insights into PRSU’s valuation and growth prospects, including 10+ additional ProTips and comprehensive financial analysis, check out the full Pro Research Report on InvestingPro.
In other recent news, Pursuit Attractions and Hospitality reported fourth-quarter revenue of $366.5 million, surpassing analyst expectations of $250.8 million. The company also posted an adjusted loss per share of $0.15, which was better than the anticipated loss of $1.40 per share. For the full year 2024, revenue increased by 4.6% to $366.5 million, driven mainly by ticket sales, despite challenges from wildfires affecting visitation to Jasper National Park. Looking ahead, Pursuit expects revenue growth in the low-double digits for 2025 and has guided for adjusted EBITDA between $98 million and $108 million.
Additionally, Craig-Hallum initiated coverage on Pursuit with a Buy rating and a $40 price target, highlighting the company’s transition to a higher growth and margin profile following its restructuring. The sale of its GES business for $535 million has allowed Pursuit to reduce debt and focus on growth strategies, including refreshing assets and pursuing acquisitions. The company is well-positioned for mergers and acquisitions, thanks to a strong balance sheet, and plans to finance these activities primarily through debt, which will be paid down using operational cash flow.
In leadership news, Pursuit appointed Mike Bosco as the new Senior Vice President and Chief Accounting Officer, succeeding Leslie Striedel. Bosco, with a strong background in accounting and financial reporting, is expected to contribute significantly to Pursuit’s strategic goals and growth.
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