UPDATE: Bank of America Initiates Coverage on SeaWorld Entertainment with Buy Rating, $43 PT on Risk/Reward Upside

In a report published Wednesday, Bank of America analyst Bryan Goldberg initiated coverage on SeaWorld Entertainment

with a Buy rating and $43.00 price target. In the report, Bank of America noted, “We initiate SeaWorld Entertainment (SEAS) with a Buy rating and a 12-month price objective (PO) of $43. Our EV/EBITDA and P/FCF derived PO implies a 2014E EV/EBITDA multiple of 11x, a slight discount to its closest but faster growing comp, with support from an upward bias toward estimates and a likely expanding capital return program. We view risk/reward in SEAS shares as skewed to the upside (bull case upside = 2.1x bear case risk), supporting our Buy rating relative to other Media & Entertainment stocks. SEAS, a newly public company that delivers family oriented entertainment through a diversified array of theme park offerings, is best known for its flagship SeaWorld brand. At its core, we view SEAS as an attractively levered pure play on the consumer-driven theme park industry, advantaged by the tail end of a capex cycle and a pipeline of new attractions. Between now and 2016E, we project an adjusted EBITDA CAGR of +5.5%, driven by gains in attendance (+1.6%), admissions per caps (+2.9%) and in-park spending per caps (+2.2%).” SeaWorld Entertainment closed on Tuesday at $37.71.