On Friday, Truist Securities revised its outlook on Vail Resorts (NYSE:) stock, lowering its price target to $250 from $265 previously while maintaining a Buy rating on the stock.
The review follows the company's third-quarter results, which resulted in a change in the company's forecast for the resort operator's future earnings before interest, taxes, depreciation and amortization (EBITDA).
An analyst at Truist Securities revised Vail Resorts' fiscal 2024 EBITDA estimate to $836 million, down from the previous forecast of $869 million. For fiscal year 2025, the forecast was revised to $913 million from the previous estimate of $953 million.
Despite lower EBITDA forecasts, the company continues to apply a target enterprise value of 13.0 times EBITDA multiple for Vail Resorts, consistent with the previous valuation approach.
The new target price represents the company's valuation of Vail Resorts based on fiscal 2025 EBITDA estimates. According to the analyst's calculations, Vail Resorts is currently trading at an 11.7x multiple of revised fiscal 2024 EBITDA forecasts and at a 10.6x multiple of revised earnings estimates. EBITDA for fiscal 2025.
The maintained Buy rating indicates that Truist Securities continues to view Vail Resorts as a suitable investment despite revisions to the financial outlook.
The target price adjustment reflects updated analysis of the company following the company's earnings announcement and is based on expected financial performance over the next two fiscal years.
In other recent news, Vail Resorts was in the spotlight with JPMorgan downgrading its stock from Neutral to Underweight and adjusting its price target to $176 from $217 previously. This shift reflects concerns about several potential challenges that could impact the company's earnings and valuation.
Vail Resorts reported an increase in net income to $362 million in third-quarter fiscal 2024 results, up from $325 million a year earlier, despite a difficult ski season. However, sales of hit products for the upcoming 2024-2025 ski season saw a 5% decrease in units, offset by a 1% increase in sales dollars.
The company also announced plans for significant capital investments, estimated at between $219 million and $224 million for 2024. These latest developments highlight the need for investors to closely monitor these specific challenges.
CEO Kirsten Lynch reaffirmed Vail Resorts' growth strategy and competitive position, seeing significant growth opportunities in Switzerland and Europe. However, weather conditions and the return of industry to normal are expected to be important factors to visit in 2025.
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