On Wednesday, B.Riley updated its outlook on Six Flags Entertainment (NYSE:SIX) shares, increasing the price target to $35.00, up from the previous target of $31.00. The firm maintains a Buy rating on the stock.
The adjustment comes as the analyst shifts the focus from a 2024 to a 2025 model for the company’s projected revenues and expense synergies. This change is motivated by the progression into the year and the anticipated completion of Six Flags' merger. The updated model reflects an expectation of improved financial performance following the merger.
In the statement provided, the analyst explained the rationale behind the new price target, citing the updated pro forma model based on the 2025 estimates. The model takes into account the combined company's profit and loss, balance sheet, and expected revenue and cost synergies.
The analyst also adjusted the price target for Cedar Fair (NYSE:NYSE:FUN), another player in the amusement park sector, raising it from $52 to $59. The revised targets for both companies are based on the same 2025 estimates, suggesting a positive outlook for the industry's growth and the benefits of the merger.
Investors have been monitoring the progress of the merger closely, as the combined entity is expected to create a stronger competitive position in the entertainment and leisure market. The new price targets reflect the analyst's confidence in the merger's potential to enhance shareholder value.
In other recent news, Six Flags Entertainment Corporation has reported mixed financial outcomes and strategic advancements in its first-quarter 2024 earnings. The company noted a 6% increase in attendance, while revenue and guest spending saw a decrease.
The anticipated merger with Cedar Fair, L.P., having secured shareholder approval, is expected to close in the first half of 2024. Six Flags also completed significant credit refinancing in preparation for the merger.
In a recent development, Deutsche Bank (ETR:DBKGn) downgraded Six Flags' stock from Buy to Hold, reducing the price target to $27. The decision reflects a strategic choice, with the analyst maintaining confidence in the completion of the planned merger with Cedar Fair. The bank expressed a preference for Cedar Fair's stock as the better investment to capitalize on the expected benefits of the merger.
As part of its digital growth strategy, Six Flags is implementing initiatives such as a digital concierge and an entry into the metaverse. Despite a 10% decrease in the Active Pass Base, the company reported a positive trend in pass sales. These are recent developments that reflect the company's ongoing efforts to enhance the customer experience and drive growth.
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