Six Flags Entertainment (SIX) is Discounting Disastrous Attendance Without Evidence, PT to $35 as Stifel Sees 75% Upside

Stifel analyst Steven Wieczynski lowered the price target on Six Flags Entertainment (NYSE: SIX) to $35.00 (from $52.00) but maintains a Buy rating noting shares lost 50% of their value in 3 months based on multiple compression rather than negative estimate revisions.

The analyst stated "We are slashing our 2022-2024 EBITDA estimates by ~10% on average per year. The question we are going to get is why cut estimates now? The change in SIX’s share price has been all multiple compression with very little change to consensus estimates. The fear we have now is that we will start getting more and more estimate cuts which would potentially put more pressure on the shares. However, based on where shares are trading today (sub-6.5x 2023 EBITDA), we believe buyside investors have already cut forward estimates by 15%-20% which we view as being unrealistic long-term. Our revised estimates assume almost a worse case possible situation. To be clear though, we have not seen any signs that the consumer is weakening or that SIX is having any issues at their parks."

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