On Tuesday, Truist Securities revised its price target for Vail Resorts (NYSE:MTN), bringing it down to $263 from the previous $290 while maintaining a Buy rating on the stock. This adjustment follows the company's second-quarter fiscal year 2024 earnings report, which revealed Resort Adjusted EBITDA falling 4% short of the consensus. Additionally, Vail Resorts has reduced its EBITDA guidance midpoint to 5% below the initial range's low end.
The company's latest financial outcomes did not meet the expectations of the buyside, with the revised guidance being lower than anticipated. Vail Resorts' management has attributed the downward revision primarily to weather challenges and a structural shift toward late-season activities. They also noted that it is premature to ascertain if the current visitation trends suggest a long-term decline in earning potential.
In light of these developments, Truist Securities has decided to decrease its forecast for the fiscal year 2025 Resort Adjusted EBITDA by 3%. Despite the likelihood of the company's shares facing continued pressure until there is clarity on 'normalized' earnings, Truist Securities reaffirms its Buy rating. This confidence is based on Vail Resorts' strong pricing capability, as demonstrated by the newly announced Epic pass pricing, robust ancillary spending, and the potential for increased revenue from ancillary products like Epic Gear.
Moreover, the company is expected to benefit from margin improvements through workforce management tools and its initial success in international mergers and acquisitions.
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