SeaWorld Entertainment Inc SEAS management seems committed to their timeline of opening the Sesame Street attraction in the spring, adding to the company’s “high-quality marketable attractions,” according to KeyBanc Capital Markets.
The Analyst
KeyBanc's Brett Andress maintains an Overweight rating for SeaWorld, with an unchanged $35 price target.
The Thesis
SeaWorld will have healthy momentum in 2019 and beyond, given the opening of the Sesame Street attraction and the new Infinity Falls. Both attractions are poised to benefit from growth in the Orlando market, following the launch of Walt Disney Co DIS's Star Wars theme park attractions in the fall, Andress said.
SeaWorld seems to be on track with the plan for $50 million of additional savings in 2020 and the new headquarters creates an opportunity to further consolidate corporate functions.
The company witnessed healthy initial response to its new season pass offerings launched in October. SeaWorld seems poised for growth in FY2019, with deferred revenues more than 15 percent exiting the third quarter and over 40 percent pass penetration, Andress said.
Management indicated an increase in international marketing, which should be able to create enough momentum to partially offset currency exchange related headwinds.
Price Action
Shares of SeaWorld were trading around $28.15 at the time of publication.
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