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On Tuesday, UBS analyst Arpine Kocharyan maintained a Buy rating on Six Flags (NYSE:SIX) Entertainment (NYSE:FUN) with a consistent price target of $49.00, representing a 38% upside from the current price of $35.38. The stock, which has declined 26% over the past six months, appears slightly undervalued according to InvestingPro Fair Value calculations. Kocharyan’s analysis supports the amusement park company’s financial prospects, although some projections fall short of the company’s own targets.[Want deeper insights? InvestingPro subscribers have access to 10 additional expert tips about Six Flags, including crucial information about its debt structure and profitability outlook.]
Kocharyan’s forecast for Six Flags’ earnings before interest, taxes, depreciation, and amortization (EBITDA) for the fiscal year 2025 remains at $1.086 billion, slightly below the consensus estimate of $1.107 billion among other analysts. For context, the company’s current EBITDA stands at $704.7 million. The UBS estimated compound annual growth rate (CAGR) for EBITDA through 2028 is projected at 8%, which is less than both the consensus of 8.9% and Six Flags’ long-term goal of a 10% CAGR.
The UBS attendance growth forecast from 2025 to 2028 is pegged at a CAGR of 2.6%, which is more conservative than Six Flags’ own guidance of a 6% increase, but aligns closely with the Street’s expectation of approximately 3%. Despite these modest attendance growth figures, UBS’s top-line revenue estimate for 2028 matches Six Flags’ guidance at around $3.8 billion.
However, there is a notable divergence in EBITDA margin expectations. While Six Flags is aiming for a 40% margin, UBS anticipates a margin of 35.4%, with the Street’s forecast slightly higher at 37.4%. This difference suggests that analysts are cautious about the company’s ability to reach its profitability targets.
Kocharyan’s unchanged price target and rating reflect a balanced view of Six Flags’ future performance, acknowledging the company’s potential while also considering the challenges it may face in achieving its ambitious financial goals.
In other recent news, Six Flags Entertainment has been the focus of several analyst reports following a recent investor event. Stifel analysts raised their price target for Six Flags to $50, maintaining a Buy rating, citing confidence in the company’s long-term financial goals, which include achieving approximately $1.5 billion in adjusted EBITDA and $600 million in free cash flow by 2028. UBS also maintained a Buy rating with a steady price target of $49, highlighting Six Flags’ management’s confidence in reaching visitation targets for 2025, bolstered by ongoing growth in hotel bookings and in-park spending.
Meanwhile, Jefferies increased its price target slightly to $42, continuing to recommend a Buy rating. Jefferies emphasized Six Flags’ ambitious financial goals, including a compound annual growth rate of 6% for revenue by 2028, and noted the importance of reducing leverage to align with historical EBITDA multiples. Stifel also adjusted its outlook, cutting the target to $48 while maintaining a Buy rating, suggesting that the market overreacted to a first-quarter earnings miss.
Despite these adjustments, analysts remain optimistic about Six Flags’ strategic initiatives and potential for sustainable growth. The company is reportedly focusing on cash generation and improving guest experiences to drive future performance. These developments indicate a continued positive outlook from analysts, who see Six Flags as undervalued at its current market price.
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