Tuesday, Truist Securities resumed coverage on shares of Cedar Fair (NYSE: NYSE:FUN), now part of the merged entity with Six Flags (NYSE:SIX) Entertainment Corporation, with a Buy rating and a price target of $62.00.
The coverage comes after the completion of the merger between Cedar Fair, L.P. and Six Flags Entertainment Corporation, creating a larger amusement park company under the Six Flags name.
The analyst at Truist Securities highlighted the potential of the combined company, citing its pro-forma profit and loss statement, which includes over $1.2 billion in adjusted EBITDA including synergies.
The new price target is based on a 9.5x estimated 2025 EBITDA multiple, which suggests that there is a potential upside of more than 20% to Cedar Fair's current share price.
The merger has created a significant presence in the amusement park sector, with the combined company's current capital structures and historical valuation ranges being key factors in the positive outlook. According to the analyst, these financial metrics support the belief in the stock's potential growth.
Truist Securities' price target of $62.00 for Cedar Fair reflects confidence in the financial performance and strategic positioning of the newly formed Six Flags Entertainment Corporation. The target is set in the context of the company's forecasted EBITDA and the anticipated benefits from the merger, including cost synergies.
The analyst's commentary underscores the expectation that the merger will provide a substantial financial uplift for the company. With the combined resources and market presence, Cedar Fair, now under Six Flags, is positioned for a stronger performance in the amusement park industry. The coverage by Truist Securities indicates a positive outlook for Cedar Fair's shares in the wake of the merger.
In other recent news, Cedar Fair and Six Flags Entertainment Corporation have announced significant developments following their merger. The combined entity, still known as Six Flags, has undergone major leadership changes, with Selim Bassoul appointed as the Executive Chairman of the Board of Directors. Bassoul's compensation package includes a base salary, target bonus, transaction bonus, and restricted stock, with specific terms for termination benefits.
In financial news, Cedar Fair recently reported robust net revenues of $102 million, attributed to higher season pass sales and favorable weather conditions. In connection with the merger, Cedar Fair has set a consent payment date for note holders of the company's senior notes due in 2025, 2027, 2029, and 2028. Additionally, Six Flags has declared a special dividend of $1.53 per share, payable to stockholders upon the completion of the merger.
Analyst firm Oppenheimer has adjusted its price target for Cedar Fair shares from $49 to $67, reflecting optimism about the potential value of the legacy Six Flags assets under Cedar Fair's management.
Other firms, including B.Riley, Deutsche Bank, Citi, Truist Securities, and Stifel, have maintained Buy ratings on Cedar Fair's stock, signaling confidence in the company's strategic positioning and the expected financial benefits from the merger. These recent developments highlight the evolving landscape of the amusement park industry.
InvestingPro Insights
Following the merger between Cedar Fair and Six Flags Entertainment Corporation, investors are keenly observing the newly formed entity's financial health and market performance. According to real-time data from InvestingPro, Cedar Fair has a market capitalization of $2.89 billion and is trading at an earnings multiple of 22.7. This valuation reflects a significant anticipation of growth, with analysts predicting an increase in net income and sales growth in the current year.
InvestingPro Tips suggest that while Cedar Fair is trading at a high revenue valuation multiple and near its 52-week high, it has demonstrated a strong return over the last three months, with a 39.28% total price return. Moreover, analysts remain optimistic about the company's profitability, with expectations of profitability over the last twelve months. However, it's noteworthy that short-term obligations exceed liquid assets, which could be a point of consideration for risk-averse investors.
For those looking to delve deeper into Cedar Fair's financials and future outlook, InvestingPro offers additional tips and metrics. With the exclusive coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking further insights that could inform investment decisions. In total, there are 11 additional InvestingPro Tips available for Cedar Fair, which can be accessed through the platform.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.