On Friday, Truist Securities adjusted its outlook for Vail Resorts (NYSE:MTN) shares, reducing the price target to $250 from the previous $265 while sustaining a Buy rating for the stock.
The revision follows the company's third-quarter results, which led to a change in the firm's projections for the resort operator's future earnings before interest, taxes, depreciation, and amortization (EBITDA).
The analyst at Truist Securities revised the fiscal year 2024 EBITDA estimate for Vail Resorts to $836 million, down from the earlier forecast of $869 million. For fiscal year 2025, the projection has been adjusted to $913 million from the previous estimate of $953 million.
Despite the lowered EBITDA forecasts, the firm continues to apply a 13.0x target enterprise value to EBITDA (EV/EBITDA) multiple to Vail Resorts, consistent with the prior valuation approach.
The new price target represents the firm's valuation of Vail Resorts based on the updated fiscal 2025 EBITDA estimates. According to the analyst's calculations, Vail Resorts is currently trading at a multiple of 11.7x to the revised fiscal 2024 EBITDA projection and at a multiple of 10.6x to the fiscal 2025 EBITDA estimate.
The maintained Buy rating indicates that Truist Securities continues to view Vail Resorts as a favorable investment despite the adjustments to the financial projections.
The price target adjustment reflects the firm's updated analysis following the company's reported earnings and is based on the projected financial performance over the next two fiscal years.
In other recent news, Vail Resorts has been in the spotlight with JPMorgan (NYSE:JPM) downgrading its stock rating from Neutral to Underweight and adjusting the price target to $176 from the previous $217. This shift reflects concerns over several potential challenges that could impact the company's earnings and valuation.
Vail Resorts has reported an increase in net income to $362 million in its third-quarter fiscal 2024 results, up from $325 million the previous year, despite a challenging ski season. However, pass product sales for the upcoming 2024-2025 ski season have seen a 5% decrease in units, offset by a 1% increase in sales dollars.
The company has also announced plans for significant capital investments, estimated to be between $219 million and $224 million for 2024. These recent developments highlight the need for investors to closely monitor these identified challenges.
CEO Kirsten Lynch reaffirmed Vail Resorts' growth strategy and competitive positioning, seeing significant growth opportunities in Switzerland and Europe. However, weather conditions and industry normalization are expected to be significant factors for visitation in 2025.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.