Vail Resorts Price Target Cut By 10% Following Q2 Earnings As Analyst Struggles To Find Positive Catalyst

  • Truist Securities analyst Patrick Scholes reiterated a Hold rating on the shares of Vail Resorts, Inc. MTN and lowered the price target from $292 to $262.
  • MTN reported overall revenues up 21.5% y/y to $1.102 billion, above the analyst's expectation of $1.075 billion.
  • Total EBITDA was $397 million, a result well below the analyst's $465 million estimate and EPS of $5.16 was lower than the analyst's expectation of $6.32.
  • While the company had not provided specific 2Q financial guidance, in January the company had noted that FY23 Resort Reported EBITDA would be at the lower half of guidance provided in September.
  • The analyst believes the vast majority of estimates were not updated following the January announcement.
  • The analyst noted not many were expecting great results/guide from MTN this quarter, given the media headlines about resorts shutting down and road closures in the Lake Tahoe area combined with unusual warmth and low snowfall in the Northeast.
  • The analyst's opinion on the weak results and guide is that the challenges in paring back costs fast enough lead to the earnings miss and guidance reduction.
  • The analyst sees Vail Resorts as a quality company with consistent pricing power and minimal, if any new ski resort supply/competition emerging.
  • Meanwhile, the analyst noted a struggle to find a positive catalyst to get more excited about the name at the moment.
  • Price Action: MTN shares are trading lower by 4.23% at $219.29 on the last check Friday.
  • Photo Via Company
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