Vail Resorts Faces Several Headwinds Despite Its Portfolio Strength, Analyst Says

J.P. Morgan analyst Matthew R. Boss reiterated the Underweight rating on Vail Resorts, Inc. MTN, raising the price forecast to $167 from $166.

The analyst suggests that while Vail Resorts is well-positioned for the future due to its top-tier resort portfolio, de-risked operating strategy with its Epic Pass options, and a strong customer base of higher-income, avid skiers, four key challenges could impact the business.

These include the normalization of industry trends, leading to a decline in season pass sales to start the year, the saturation of the season pass model, potential resistance to further price increases after three years of 8% hikes, and a shift in customer demographics, Boss writes.

This combination of factors points to potential downside risks in both earnings and the company’s overall valuation.

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In its second-quarter results released yesterday, the company reported quarterly earnings of $6.56 per share, which beat the consensus estimate of $6.34.

Quarterly revenue came in at $1.14 billion, which met the analyst consensus estimate and is an increase over revenue of $1.08 billion from the prior year’s quarter.

Boss notes that local visitation has improved year-over-year in the reported quarter, which aligns with internal expectations, driven by more typical weather patterns, especially on the East Coast.

Meanwhile, destination visitation is facing a shift, with consumers delaying their visits to later in the season, resulting in a mixed headwind that impacts ancillary revenue.

Specifically, local guests are spending less than destination guests, leading to a decline in revenue per skier visit.

Despite these shifts, management has confirmed that destination guest spending remains strong, with no signs of a pullback from consumers thus far, even amid ongoing macroeconomic concerns.

Following the results, the analyst models FY25 EPS of $7.39 and FY26 EPS of $7.87.

Price Action: MTN shares are trading higher by 7.02% to $164.37 at last check Tuesday.

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