UBS maintains Buy on Six Flags, steady $49 price target

On Wednesday, UBS reaffirmed its positive stance on Six Flags (NYSE:SIX) Entertainment (NYSE:FUN), maintaining a Buy rating with a consistent price target of $49.00. The theme park operator, currently trading at $36.33 with a market capitalization of $3.67 billion, has been navigating the post-pandemic landscape with an eye on growth and customer retention.

The UBS analyst, Arpine Kocharyan, highlighted that Six Flags’ management remains confident about the company’s visitation target for 2025, projecting an annual increase of 2-3%. This outlook is supported by the ongoing double-digit growth in hotel bookings extending into May, alongside robust in-park spending by guests. According to InvestingPro data, the company’s revenue is forecast to grow by 24% this fiscal year, suggesting strong momentum in its core business.

Six Flags has reportedly not experienced a slowdown in consumer interest, with an increase in group business bookings. Corporate groups, however, are approaching with more caution. Despite this, the company is preparing to overcome challenges such as the poor weather conditions that affected visitor numbers in July of the previous year. InvestingPro has identified several key factors that could impact Six Flags’ performance, with 8 additional exclusive insights available to subscribers.

Looking ahead to the second half of the year, management at Six Flags anticipates a potential uptick in visitation. This is expected to be driven by improvements in food and beverage offerings and ride upgrades, which could serve as key factors in attracting more visitors to their parks.

The company’s strategic initiatives appear to be geared towards enhancing the guest experience and capitalizing on the strong demand for leisure and entertainment activities as the industry continues to recover. With a steady price target and a Buy rating from UBS, Six Flags Entertainment remains a company to watch in the leisure sector.

In other recent news, Six Flags Entertainment has been the focus of several analyst reports, highlighting key developments for investors. Stifel analysts have adjusted their price target for Six Flags, first increasing it to $50 and then reducing it to $48, while maintaining a Buy rating. This adjustment reflects the firm’s confidence in the company’s strategic goals, which include achieving approximately $1.5 billion in adjusted EBITDA and $600 million in free cash flow by 2028. Meanwhile, Jefferies has also raised its price target for Six Flags to $42, maintaining a Buy rating, citing the company’s ambitious financial targets and strategic plans presented during an investor day.

JPMorgan, however, has taken a more cautious stance, significantly cutting its price target to $28 and maintaining an Underweight rating. The firm expressed concerns about potential risks, such as challenges in regaining attendance and managing an elevated cost structure following the merger with Cedar Fair. They also noted the pressure on free cash flow due to necessary capital expenditures.

Despite these varied perspectives, analysts generally recognize Six Flags’ potential for growth and the strategic steps it is taking to enhance its financial performance. The company’s focus on increasing attendance and guest spending, alongside operational efficiencies, is seen as a pathway to achieving its long-term financial objectives. These recent developments offer investors a clearer picture of Six Flags’ future prospects and the challenges it may face.

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