Buy Rating Reiterated for Cedar Fair Amid Strong Demand and Upcoming Merger Synergies

B.Riley Financial analyst Eric Wold reiterated a Buy rating on Cedar Fair (FUN – Research Report) yesterday and set a price target of $52.00.

Eric Wold has given his Buy rating due to a combination of factors including Cedar Fair’s strong demand indicators and increased consumer spending patterns. Despite a mixed first quarter in 2024, where expenses were higher than expected due to an additional calendar week for parks not yet open, Wold remains optimistic about the attendance outlook and anticipates another year of record AEBITDA. He highlights the regional theme parks’ attractiveness as a consumer play post-pandemic, citing operational and technological improvements and the potential for high incremental margins on attendance growth.
Furthermore, Wold’s confidence is bolstered by the ongoing merger with SIX, which he believes will bring about significant revenue and cost synergies. Despite lower per capita revenue in admissions and in-park spending for the quarter, largely due to pricing changes at one park, the overall trend in season pass sales and other all-season products suggests a strong consumer uptake. The merger is also expected to close in the first half of 2024, reinforcing the positive outlook for Cedar Fair’s stock. Therefore, Wold reiterates his Buy rating and sets a price target of $52, maintaining his positive stance on the company’s financial prospects.

In another report released on May 8, Truist Financial also maintained a Buy rating on the stock with a $45.00 price target.

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Cedar Fair (FUN) Company Description:

Cedar Fair LP engages in the operation of amusement parks, outdoor and indoor water parks, and hotels. Its amusement parks include Cedar Point, Kings Island, Canada’s Wonderland, Dorney Park and Wildwater Kingdom, Valleyfair, Kings Dominion, Worlds of Fun, Knott’s Berry Farm, and California’s Great America. The company was founded on May 13, 1983 and is headquartered in Sandusky, OH.