SeaWorld Entertainment (SEAS) Named 'Catalyst Call: Buy Idea' at Deutsche Bank

SeaWorld Entertainment (NYSE: SEAS) was named a 'Catalyst Call: Buy Idea' at Deutsche Bank, saying they see "achievable" top and bottom line results for 2Q and full year 2022.

Analyst Chris Woronka commented, "We believe SEAS is on pace to beat what appear to be achievable top and bottom line results for 2Q and full year 2022. Orlando hotel data continues to show accelerating momentum in visitation to the market, with RevPAR improving from +5% vs. 2019 levels at the beginning of 2Q22 to nearly +30% by the end of the quarter. We are also aware that Disney World has strategically maintained certain attendance caps in an effort to enhance the overall customer experience, and we believe SEAS likely is benefitting from extra visitation at its nearby parks as a result (note, SEAS was not operating at full capacity in Orlando prior to Covid, so above2019 levels of attendance are logistically possible). One of SEAS' public peers recently disclosed strong in-park per capita spending for most of calendar 2Q, and we view SEAS as having a favorable customer segmentation mix. We also think increased visitation from local guests in response to population migration to Florida is likely being underappreciated by the market. Usage of J-1 visa workers (which SEAS has not done much of in the past) could be a further boost to margins, in excess of Street expectations. Finally, at approximately 7x 2022E EV/EBITDA and 11x P/E, we view valuation and risk/reward as quite favorable, driven in large part by the stock's 30% decline YTD (vs. a decline of 15% for the SPX)."

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