Wedbush Having Fun At Cedar Fair, Loves Its Yield And Growth

In a report published Friday, Wedbush analysts initiated coverage of

with an Outperform rating and price target of $69. The analysts believe that investors are underappreciating the size and reliability of the stock's distribution payout, as well as the growth potential of the distribution in the coming years. "[T]hrough a combination of distribution yield, distribution growth, and expanding valuation, we believe that FUN units represent a compelling total return story," the analysts said. According to the Wedbush report, Cedar Fair is likely to be able to achieve its 2016 and 2018 adjusted EBITDA targets a year earlier than guided. In the longer term, however, the analysts expect the acceleration in EBITDA growth to slow down due to incremental investments and leveraging of the top line towards margin expansion. "More broadly, we believe that Cedar Fair is a unique and compelling combination of risk and reward, with the vast majority of the company's reliable and growing cash flows being returned to investors," the analysts added.