Vail Resorts, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Stephen Grambling from Morgan Stanley maintained a Hold rating on the stock and has a $151.00 price target.
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Stephen Grambling has given his Hold rating due to a combination of factors related to both near-term headwinds and longer-term opportunities. He notes that snowfall at Vail’s key resorts is significantly below last year and historical levels, with a much smaller share of terrain currently open, which could weigh on visitation and spending in this crucial period. Although strong advance pass sales have enabled management to reaffirm full-year guidance, he highlights that this outlook assumes typical weather patterns, while current conditions and early-season trends suggest risk that results could disappoint when the company provides its mid-January update. In addition, Grambling points out that he is still looking for clearer evidence on how Vail’s evolving pricing strategy and food & beverage initiatives will translate into sustainable earnings growth.
At the same time, Grambling acknowledges the stock has already moved higher following the recent earnings release, limiting near-term upside from current levels. His updated projections incorporate weather-related softness and place his EBITDA forecasts at the lower end of management’s range and below market consensus for the next several years. With only modest upside to his revised 12-month price target, he adopts a neutral, or Equal-weight, stance, seeing a balance between the short-term operational pressures and the longer-term potential benefits from Vail’s strategic initiatives. As a result, he concludes that a Hold rating is appropriate until visibility improves on both weather impacts and the payoff from management’s new growth strategies.
In another report released yesterday, Bank of America Securities also maintained a Hold rating on the stock with a $165.00 price target.