On Wednesday, B.Riley maintained a Buy rating on Cedar Fair (NYSE: NYSE:FUN) stock and increased the price target to $59 from the previous $52. The revision comes as the firm shifts its focus from 2024 to 2025 projections, influenced by the progression of the year and the anticipated merger completion.
The firm's analyst highlighted that the updated price targets for Cedar Fair and its potential merger partner, Six Flags (NYSE: NYSE:SIX), are now based on a pro forma model that incorporates 2025 estimates. This model considers the combined company's profit and loss, balance sheet, and expected revenue and expense synergies.
According to the analyst, the transition to 2025 estimates is justified by the current year's advancement and the nearing merger culmination. This forward-looking approach has also resulted in a rise of the price target for Six Flags from $31 to $35.
The updated price target for Cedar Fair represents a shift in the firm's valuation method, which previously relied on a pro forma model based on 2024 estimates for each company individually. The new model reflects a more current and future-oriented financial perspective.
The B.Riley analyst's comments underline the firm's confidence in the financial benefits and synergies expected from the merger. The raised price targets for both Cedar Fair and Six Flags indicate a positive outlook for the combined entity's financial performance in the coming years.
In other recent news, Cedar Fair, a leader in regional amusement parks, reported strong financial results for the first quarter of 2024, with net revenues reaching $102 million and a 1.3 million guest attendance.
This positive performance was driven by higher season pass sales and favorable weather conditions. The company's proposed merger with Six Flags, expected to be completed by the end of Q2, is also progressing well.
Analysts from Deutsche Bank, Citi, Truist Securities, and Stifel have expressed confidence in Cedar Fair's strategic positioning and value, leading to increased price targets and maintained Buy ratings on the company's stock.
These recent developments suggest a promising outlook for Cedar Fair, with the upcoming peak season and merger completion expected to enhance its market performance and shareholder value.
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