Wedbush: Buy Six Flags

In a report published Thursday, Wedbush analysts initiated coverage of

with an Outperform rating and a price target of $58, saying that upside to the company's stock should be driven by domestic pricing and international growth. Project 350 has been completed and Project 500 is scheduled to be achieved this year. With these in place, the analysts believe that Six Flags has the potential to "exceed the $600M in modified EBITDA targeted for 2017." This translates to a CAGR of about 8 percent over the next three years, consisting of 1-2 percent attendance growth, 3-4 percent per capita spending growth and 3-4 percent operating leverage annually. "We are modeling Modified EBITDA of $515M in 2015 (8% growth) a small acceleration over the prior two years," the analysts added. Although Six Flags' stock is at a premium valuation and it is among the "priciest of the amusement park stocks," there appear to be organic and international growth opportunities that will boost the shares higher. In the report Wedbush mentioned Six Flags' long-term story being a compelling one. If the company can marginally grow attendance, continue to increase pricing in the mid-single digits and drive solid operating leverage, it would be able to "handily exceed the current 2017 EBITDA target of $600M before getting a shot in the arm from the opening of international parks in international markets (likely 2018 or shortly thereafter)."