Deutsche Bank Reiterates Buy Rating on Six Flags Entertainment (FUN)

Deutsche Bank analyst Chris Woronka reiterated a Buy rating and $58.00 price target on Six Flags Entertainment (NYSE: FUN)

The analyst comments "FUN reports pre-market on 11/6. We are expecting a noisy quarter, impacted by two key items: a (theoretically well understood) calendar shift and operating days adjustment within the legacy Cedar Fair portfolio (five fewer days during the peak June period in 3Q24 vs. 3Q23), and likely soft visitation trends at legacy Six Flags parks following the merger closing on 7/1 (including the impact from certain changes to park policies implemented within the legacy Six Flags portfolio at that time). We are expecting to hear positive commentary around 4Q / Halloweenthemed events across both portfolios. We are not anticipating that FUN management will provide much in the way of a formal or informal 2025 outlook, but we should get some sort of an update on merger synergies and further commentary on early pacing of 2025 season pass products (including the new "All Park Passport" super pass). Net, we see sentiment on FUN as remaining decidedly negative. Bears continue to cite concerns about free cash flow generation in 2025 and 2026 (tied in part to a belief that cap-ex will be much higher than historical ranges as FUN management makes refurbishment of the legacy Six Flags parks a top priority) and others question whether FUN can actually achieve improved top and bottom line performance at legacy Six Flags properties. For our part, as we outlined in greater detail in our recent update on FUN ("Too Many Bears in the FUN Den?" published 10/3/24), we have conviction in management's ability to grow pro-forma combined adjusted EBITDA in excess of 25% on a 2026E vs. 2023A basis, albeit with the spread of growth between 2025E and 2026E still a bit unclear to us."

For an analyst ratings summary and ratings history on Six Flags Entertainment click here. For more ratings news on Six Flags Entertainment click here.

Shares of Six Flags Entertainment closed at $39.37 yesterday.

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