Bank of America Securities analyst Shaun Kelley reiterated a Hold rating on Vail Resorts (MTN – Research Report) today and set a price target of $250.00.
Shaun Kelley has given his Hold rating due to a combination of factors that reflect a cautious outlook on Vail Resorts’ near-term performance. One major concern stems from the reported lower-than-expected second quarter revenues and EBITDA, which prompted the company to reduce its full-year EBITDA guidance significantly. This revision was attributed to subpar weather conditions and a change in visitation patterns which did not align with previous expectations, despite recent improvements in snowfall. The disappointing visitation numbers were a critical element in the decision to downgrade the stock, indicating a less optimistic view on the company’s short-term revenue potential.
Additionally, the stock’s after-market decline was a reaction to the larger-than-anticipated guidance reduction, which factored in the soft visitation, weaker sales of window tickets, and a negative mix impact. However, Vail Resorts’ high operating leverage was somewhat mitigated by effective cost control measures. Looking ahead, while there is potential for improvement in the coming months with the spring break period, pass pre-commitments, and better lodging bookings, uncertainty remains if visitation levels or consumer behavior fail to normalize. Despite these concerns, Kelley acknowledges Vail Resorts’ pricing power and strategy of securing advanced commitments, but maintains a cautious stance due to the slowing growth trajectory which underpins the Neutral rating.
According to TipRanks, Kelley is a 3-star analyst with an average return of 2.8% and a 51.22% success rate. Kelley covers the Consumer Cyclical sector, focusing on stocks such as Vail Resorts, Penn National Gaming, and Marriott International.
In another report released today, J.P. Morgan also assigned a Hold rating to the stock with a $252.00 price target.
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Vail Resorts (MTN) Company Description:
Vail Resorts, Inc. is a holding company, which engages in the operation of mountain resorts. It operates through the following segments: Mountain, Lodging, and Real Estate. The Mountain segment covers the operation of mountain resorts or ski areas, and related activities. The Lodging segment includes ownership of hotels, condominium management, Colorado resort ground transportation company, and mountain resort golf courses. The Real Estate segment holds real property at mountain resorts primarily throughout Summit and Eagle Counties in Colorado. The company was founded by Pete Seibert and Earl Eaton in March 1957 and is headquartered in Broomfield, CO.
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