Yahoo Finance Need To Know: Analysts Just Made A Substantial Cut To Their Six Flags Entertainment Corporation (NYSE:SIX) Estimates
One thing we could say about the analysts on Six Flags Entertainment Corporation (NYSE:SIX) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.
After the downgrade, the consensus from Six Flags Entertainment's 13 analysts is for revenues of US$1.5b in 2022, which would reflect a perceptible 4.2% decline in sales compared to the last year of performance. Statutory earnings per share are presumed to accumulate 8.1% to US$1.76. Previously, the analysts had been modelling revenues of US$1.7b and earnings per share (EPS) of US$2.59 in 2022. Indeed, we can see that the analysts are a lot more bearish about Six Flags Entertainment's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
View our latest analysis for Six Flags Entertainment
The consensus price target fell 16% to US$36.64, with the weaker earnings outlook clearly leading analyst valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Six Flags Entertainment at US$60.00 per share, while the most bearish prices it at US$20.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Six Flags Entertainment's past performance and to peers in the same industry. One more thing stood out to us about these estimates, and it's the idea that Six Flags Entertainment's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 8.1% to the end of 2022. This tops off a historical decline of 5.6% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 13% annually. So while a broad number of companies are forecast to grow, unfortunately Six Flags Entertainment is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Six Flags Entertainment. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Six Flags Entertainment.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Six Flags Entertainment going out to 2024, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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