Investing.com -- UBS initiated coverage on the U.S. theme park sector rating Cedar Fair-Six Flags parent Six Flags (NYSE:SIX) Entertainment a Buy with a $49 price target, while assigning a Neutral rating to United Parks citing concerns over macro headwinds and increased competition in Florida.
UBS sees Cedar Fair-Six Flags as the preferred pick in the sector, forecasting more than 60% upside from current levels.
We believe Six Flags is likely to beat both our and Street estimates, analysts wrote, pointing to meaningful revenue synergies from its merger with Cedar Fair (NYSE:FUN).
UBS expects 2026 EBITDA of $1.2 billion, assigning an 8x multiple, below the historical average of 8.5x, but above the current 6.8x.
With Cedar Fair-Six Flags shares down over 45% from January highs, UBS sees opportunity for multiple re-rating.
Despite macro concerns, the theme park industry has shown resilience, offering affordable experiential entertainment, the note said, adding that sector profitability during the 2008 downturn declined less than what is currently priced into Six Flags Entertainment.
Upside drivers for Cedar Fair-Six Flags include a rebound in season pass visitation and improved revenue from price alignment across the merged parks. UBS estimates $125–$130 million in revenue synergies, exceeding the company’s $80 million guidance.
In contrast, UBS was more cautious on United Parks initiating with a $49 price target based on 7x 2026E EBITDA, a discount to historical norms.
The firm flagged competitive pressure from the launch of Comcast’s Epic Universe theme park in Florida, which could reduce PRKS visitation by 3–4% in 2025.
We see EBITDA decline into 2025, versus Street’s expectation of growth, UBS wrote, adding that per capita pricing may be harder to sustain amid macro and competitive headwinds.
This content was originally published on Investing.com
