Market Overview

The SeaWorld Turnaround Story Remains Misunderstood

Share:
The SeaWorld Turnaround Story Remains Misunderstood

Don't short Shamu.

Shares of SeaWorld Entertainment Inc (NYSE: SEAS) will rally as the company executes a five-point turnaround plan, Stifel analyst Steven Wieczynski said in a Tuesday note.

SeaWorld bears point to concerns tied to branding, attendance, cost cuts and competitiveness, Wieczynski said.

“While we fully understand the bears’ concerns, we also don’t believe any of those concerns are overly warranted and believe SEAS management continues to address those challenges head-on.”

Stifel maintains a Buy on SeaWorld with a $23 price target. Even with SeaWorld trading at a 15–25 percent discount to its peers, shares are still worth $24–$29 based on the company’s projected 2018 EBITDA, according to Stifel.

SeaWorld ended its breeding program for captive killer whales in 2016, but remains under pressure from animal rights groups. "Some people love SeaWorld and some people will never like us," CEO Joel Manby told the LA Times last year.

‘Multiple Positive Catalysts’

SeaWorld has announced positive news in recent months, Wiecznyski said: Debt restructuring, the sale of the 21-percent stake owned by Blackstone Group LP (NYSE: BX) and the construction of a “Sesame Street” theme park.

The Stifel analyst said the developments haven’t been fully priced into SeaWorld shares.

The company is focusing on pulling guests from a 300-mile radius around its parks and is rolling out a general admission strategic pricing model, Wieczynski said.

Risks to the model behind Stifel’s $23 price target include a short operating season, “animal activist overhang,” bad weather, theme park accidents and a reliance on discretionary spending by consumers, according to Tuesday’s note.

Related links:

Watch SeaWorld: Massive Stake Acquired For 33% Premium

What To Expect From SeaWorld's Expansion Into Abu Dhabi
______
Image Credit: By Fernandafb10 - Own work, CC BY-SA 4.0, via Wikimedia Commons

Latest Ratings for BX

DateFirmActionFromTo
Feb 2020Morgan StanleyMaintainsOverweight
Feb 2020Argus ResearchMaintainsBuy
Jan 2020Morgan StanleyMaintainsOverweight

View More Analyst Ratings for BX
View the Latest Analyst Ratings

Posted-In: Blackstone GroupAnalyst Color Long Ideas Reiteration Travel Analyst Ratings Trading Ideas General Best of Benzinga

 

Related Articles (BX + SEAS)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
KTOSCanaccord GenuityMaintains22.0
DEACCraig-HallumInitiates Coverage On25.0
PANWSunTrust Robinson HumphreyMaintains230.0
TREXDA DavidsonDowngrades104.0
PANWNorthland SecuritiesMaintains245.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com