Six Flags downgraded at William Blair after attendance erosion (NYSE:SIX)

Greater ticket costs damage Six Flags Leisure (NYSE:SIX), prompting analysts at William Blair to cut back their ranking on the inventory as administration reorients their technique.

The analysts famous that premiumization efforts forwarded by administration helped drive a 43% decline in park attendance relative to 2019. Whereas credit score was given to the theme park’s executives for reassessing the technique and correcting the errors made, fairness analyst Ryan Sundby instructed shoppers that “recognizing there’s a downside doesn’t essentially translate into having an answer available, significantly with administration suggesting that it might take a number of years for attendance to get better to its optimum goal ranges.”

He added {that a} lack of formal steering raises skepticism on the power of the corporate to rapidly appropriate points. On the very least, it lacks the transparency that he and his workforce need on the present juncture, necessitating a trimming of estimates towards extra cautious ranges.

“Given lower-than-anticipated attendance, we decreased our 2022 gross sales estimate by $55M, to $1.365B, and our corresponding adjusted EBITDA estimate by $25M, to $465M,” he defined. “We additionally lower our 2023 gross sales estimate by $110M, to $1.440B, and our corresponding adjusted EBITDA estimate by $50M, to $515M.”

As a result of estimate cuts and uncertainty on attendance developments, Sundby reeled in his ranking to Market Carry out from a previous Outperform ranking. Shares of the Arlington, Texas-based park operator fell 3.96% shortly earlier than Friday’s market open.

Learn the earnings name transcript.