Vail Resorts price target lowered to $169 by UBS on weak pass growth

UBS lowered its price target on Vail Resorts (NYSE:MTN) to $169.00 from $185.00 on Wednesday, while maintaining a Neutral rating on the ski resort operator’s stock. Currently trading at $155.94, InvestingPro data shows the stock is slightly undervalued, with 6 analysts recently revising their earnings estimates downward.

The firm cited concerns about negative pass unit growth for the 2025-26 ski season, suggesting Vail’s announced 7% price increase might translate to only a 2-3% net pricing increase due to Epic pass mix issues. UBS estimates underlying same-store visitation declined 2-3% for Vail this year despite what it characterized as decent snow conditions throughout the season. This aligns with the company’s modest revenue growth of 2.38% over the last twelve months, according to InvestingPro data.

UBS now expects flattish EBITDA for fiscal 2026, down from its previous forecast of 5% growth, with potential downside risk if Vail increases marketing spending to attract "less committed" skiers. The company has identified marketing as a key lever in its strategy going forward.

Labor cost pressures remain a structural medium-term headwind for Vail, according to UBS, which believes the company’s strategy could put further pressure on margins. The research firm noted that Vail attributed softer than expected results partly to "less than optimal marketing efforts."

For the upcoming fiscal year, UBS projects flattish visitation with average pricing up low single digits, while underlying cost growth of 3% will be partially offset by the absence of $9 million in CEO transition costs and $15 million in one-time expenses that affected the current year. Despite these challenges, the company maintains a healthy 5.67% dividend yield and an overall GOOD financial health score, as reported by InvestingPro, which offers comprehensive analysis of 1,400+ stocks through its Pro Research Reports.

In other recent news, Vail Resorts reported its earnings for the second quarter of 2025, surpassing analysts’ expectations with an earnings per share of $10.54, compared to the forecasted $10.17. However, the company missed its revenue forecast, posting $1.3 billion against the expected $1.31 billion. Despite the revenue shortfall, Mizuho (NYSE:MFG) Securities maintained its Outperform rating on Vail Resorts, slightly increasing the stock’s price target from $215.00 to $216.00. The analysts noted that the company’s quarterly results were largely in line with expectations, with Resort EBITDA coming in at $647.7 million, slightly above Mizuho’s estimate but slightly below the Street’s forecast.

Vail Resorts experienced a 3.7% year-over-year decrease in skier visits, which was less than the anticipated 4.4% decline. Despite challenges such as a decrease in pass units before the 2025 season and issues at Park City (NYSE:TRAK), the company managed to grow its EBITDA by an estimated 6%, after various adjustments. These adjustments included costs related to CEO transition, transformation expenses, and foreign exchange impacts. Mizuho analysts highlighted several factors affecting the company’s financial performance, including a $16 million positive swing in EBITDA from Crans and $35 million in cost savings.

The company’s fiscal 2025 guidance estimates net income between $264 million and $298 million and EBITDA between $831 million and $851 million. Vail Resorts continues to invest in its offerings, including the introduction of the Epic Australia four-day pass and enhancements to the MyEpic app. These recent developments indicate Vail Resorts’ ability to navigate operational challenges while maintaining a focus on financial growth and strategic investments.

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