JPMorgan Starts SeaWorld Entertainment (SEAS) at Neutral
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JPMorgan analyst Philip Cusick initiates coverage on SeaWorld Entertainment (NYSE: SEAS) with a Neutral rating and a price target of $70.00.
The analyst comments "SEAS stock has outperformed YTD as park reopenings, improved revenue, and cost initiatives have recently benefited the stock. Still, SEAS has historical volatility in attendance trends, dependence on promotional pricing to boost attendance growth, a more intense competitive environment (particularly in the Florida market), and has seen many changes at the senior management level. We note that visibility is limited into long-term attendance trends, which, prior to COVID-19, had primarily grown at the expense of admissions revenue. Overall, we believe that near-term benefits are largely priced into the stock and look for further developments on improved per caps and reduced costs in the longer term. Our December 2022 price target of $70 reflects a ~11x forward multiple applied to our 2023 adjusted EBITDA estimate. While valuation may be sustained by the reopening trade in the near term, we see potential for a correction farther out, given the stock is trading above its pre-COVID-19 historical range of ~7-11x since its IPO."
Shares of SeaWorld Entertainment closed at $70.02 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, New Coverage
Related EntitiesJPMorgan, IPO
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