Wedbush held the line on Six Flags Entertainment Corp (NYSE: SIX) after meeting with CFO Marshall Barber and Steve Purtell, the company's senior vice president of investor relations.
One focus of the conversation centered around Six Flags' international pipeline, Hardiman said in a Thursday note. (See his track record here.)
The company's pipeline of new projects consists of four new sites, down from potentially "dozens" in the past, the analyst said. Even among the four new sites — one in Saudi Arabia, three in China — there are "clearly wide-ranging assumptions" among investors, he said.
Six Flags expressed confidence that its project in Saudi Arabia will emerge as one of the biggest parks in its entire portfolio, Hardiman said. In China, ongoing project delays are temporary, and the company expressed a "high degree of confidence" it will eventually be completed, he said.
"Most investors" are assigning zero new value to the international opportunity, the analyst said. Six Flags defended itself and highlighted that the opportunity in China alone is massive, and that Six Flags has plenty of opportunities in other countries for further projects, he said.
Anywhere from 50-100 parks in the U.S. are potential acquisition targets for Six Flags, the analyst said.
This would be consistent with the company's strategy of focusing on M&A deals, and it is likely a "matter of when rather than if" new acquisitions will be announced at a pace of at least one to two parks per year, Hardiman said.
The meetings with Six Flags emphasized that the company has several paths to upside, although "none are certain," the analyst said.
Until there is concrete evidence any of the drivers are playing out as expected, a Neutral stance remains justified, according to Wedbush.
Six Flags shares were trading up by 0.16 percent at $50.26 at the time of publication Thursday.
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Latest Ratings for SIX
|Apr 2019||Initiates Coverage On||Hold|
|Feb 2019||Downgrades||Overweight||Sector Weight|
|Dec 2018||Initiates Coverage On||Buy|
View More Analyst Ratings for SIX
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