Don’t Worry About Vail Resorts Inc. (NYSE:MTN)’s Wider than estimated loss As long as Outlook is fine
Shares of Vail Resorts, Inc. (NYSE:MTN) reached 52-week high of $169.98. There was a volatile trading on the stock as the shares hit the day’s low of $158.01, which was lower than yesterday’s close, and ranged between a loss of 1.81 percent and a gain of about 5.63 percent. Though first quarter loss is wider than the analysts’ expectations, the company’s reaffirmation of outlook is viewed positively by investors and analysts.
S&P Capital IQ retained its Strong Buy rating even after Vail Resorts reported a wider loss than expected. The firm noted that the company’s adjusted loss missed its estimates by nine cents a share. Revenues advanced two percent while EBITDA loss widened modestly for the seasonally slow period. This was despite the company’s noteworthy debut of summer activities.
Analyst Amobi pointed out that Vail Resorts reiterated its fiscal year 2017 expectations backed by ‘16/’17 season sales growth of 16 percent in unit-wise at the end of December 4.
The brokerage preferred to retain its 12-month price objective of $180 a share with 2.0 percent yield. This was based on premium of 13.0X enterprise value/ EBITDA for the fiscal year 2017 compared to peers. Amobi thinks that there is a potential upside based on the recent acquisitions both domestic, as well as, international.
S&P Capital IQ also boosted its EPS estimates by 47 cents a share for the fiscal year 2017 to $5.35. Similarly, the brokerage lifted its EPS projections by 30 cents a share to $5.74 for the fiscal year 2018.
While releasing results, Vail’s CEO, Rob Katz, commented about the early ski season indicators. He viewed, “Our sales of season passes continue to deliver outstanding results. As we approach the end of our selling period, season pass sales are up approximately 16% in units and approximately 20% in sales dollars through December 4, 2016 compared to the prior year period ending December 6, 2015 (excluding the Epic Australia Pass and Whistler Blackcomb pass sales in both periods).”
At time of writing this, the stock jumped 5.47 percent to $169.72.