Figma Shares Indicated To Open $105/$110
Wednesday - UBS has initiated coverage on Six Flags (NYSE:SIX) Entertainment (NYSE:FUN) with a Buy rating and a price target of $49.00. The firm's analysis suggests a potential for over 60% upside to the current share price, based on approximately 8 times their forecasted fiscal year 2026 EBITDA of $1.20 billion. This aligns with InvestingPro analysis, which indicates the stock is currently undervalued, trading near its 52-week low of $38.33.
The optimism from UBS stems from the belief that Six Flags is poised to outperform both UBS and consensus estimates, with the possibility of a re-rating of its multiple closer to the historical average of around 8.5x, up from the present 6.8x. Current metrics from InvestingPro show an EV/EBITDA multiple of 6.77x and a P/E ratio of 10.13x, suggesting room for expansion. This re-rating is anticipated due to expected revenue synergies following the company's merger.
UBS projects that Six Flags could realize an additional $125-$130 million in revenue synergies on top of the previously announced $80 million. According to InvestingPro, management has been actively buying back shares, demonstrating confidence in the company's future prospects. These projections have not fully accounted for the potential recovery in park visitation and the increased frequency of visits by season pass holders, as well as the opportunity to align season pass prices between Cedar Fair and legacy Six Flags parks.
The report underscores Six Flags' current undervaluation and presents an appealing risk/reward ratio of nearly 3 to 1, despite economic uncertainties. Furthermore, UBS suggests that the theme park industry, seen as a more affordable form of out-of-home entertainment, could display resilience in the face of inflationary pressures. Discover more insights and 12 additional ProTips about Six Flags with an InvestingPro subscription, including detailed financial health metrics and comprehensive analysis.
UBS concludes its coverage initiation by highlighting Six Flags' potential to surpass performance expectations, leveraging revenue synergies, and maintaining resilience in a challenging economic landscape. The company maintains a strong financial health score of 2.54 (GOOD) according to InvestingPro's comprehensive analysis.
In other recent news, United Parks & Resorts reported fourth-quarter revenue of $384 million and adjusted EBITDA of $144 million, slightly surpassing Guggenheim's expectations. Guggenheim analysts responded by raising their price target to $72 and maintaining a Buy rating, citing potential benefits from improved circumstances and strategic initiatives. Meanwhile, Barclays (LON:BARC) initiated coverage with an Equalweight rating and a $50 price target, acknowledging the company's strong financial performance but expressing concerns about long-term growth prospects due to competitive pressures. Mizuho (NYSE:MFG) Securities increased its price target to $45, maintaining an Underperform rating, highlighting positive revenue and attendance figures but expressing skepticism about the company's cost-cutting measures.
Stifel analysts also raised their price target to $74, maintaining a Buy rating, pointing to positive indicators like advance ticket sales and cost savings. They believe United Parks & Resorts is undervalued and poised for growth despite competition from Universal's new theme park. JPMorgan increased their price target to $63, holding a Neutral rating, recognizing the company's proficiency in revenue generation and cost management amidst international tourism recovery. However, they cautioned about the theme park sector's broader economic uncertainties and competitive pressures from other leisure activities. These developments reflect varied analyst perspectives on United Parks & Resorts' financial outlook and strategic positioning in the competitive theme park industry.
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