Market Overview

Goldman Sees 15% Upside At Vail Resorts

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  • Goldman Sachs analysts Afua Ahwoi, Steven Kent and Lara Fourman raised their rating on shares of Vail Resorts, Inc. (NYSE: MTN) from Neutral to Buy.
  • The firm also boosted their price target from $108 to $144. The new target implies an upside potential of roughly 15 percent.
  • The analysts anticipate Vail to be one of the main beneficiaries of what they expect to be "solid leisure travel trends in 2016."

According to a survey conducted by the firm, consumers "appetite for travel/entertainment has improved sequentially at the high end." The appetite for travel and entertainment is higher than the general appetite to spend.

In addition, the analysts believe "investors are underestimating the rebound potential of Vail’s Tahoe resorts following two weak ski seasons." Apparently, the stage is now set for strong snow conditions; thus, Goldman decided to increase its skier visit forecasts  and consequently, its EBITDA estimates above consensus.

Finally, Vail's free cash flow is surging (and should continue to do so driven by higher profitability and lower capex), providing the company with capital allocation optionality – to raise dividends and repurchase stock.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Latest Ratings for MTN

DateFirmActionFromTo
May 2020Credit SuisseInitiates Coverage OnOutperform
Apr 2020SunTrust Robinson HumphreyMaintainsBuy
Apr 2020Deutsche BankMaintainsBuy

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