Analyst Arpine Kocharyan of UBS maintained a Hold rating on Vail Resorts, retaining the price target of $169.00.
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Arpine Kocharyan has given his Hold rating due to a combination of factors impacting Vail Resorts’ financial outlook. The company has experienced a decline in season pass unit sales, with a 3% drop in units despite a 1% increase in sales dollars, attributed to higher pricing. This decline is mainly driven by fewer renewals from less tenured pass holders and a decrease in new pass holders, which raises concerns about future revenue growth.
Additionally, while Vail Resorts is ahead of its cost efficiency targets, achieving significant cost savings, the overall financial guidance for FY’26 is softer than investor expectations. The anticipated resort EBITDA and revenue growth are broadly in line with estimates but fall short of pre-release investor expectations. The underlying cost inflation, particularly from labor, offsets much of the cost savings, leading to a cautious outlook. These factors collectively contribute to the Hold rating as the company navigates these challenges.
In another report released today, Bank of America Securities also reiterated a Hold rating on the stock with a $165.00 price target.