Six Flags initiated with an Equal Weight at Morgan Stanley

Morgan Stanley analyst Thomas Yeh initiated coverage of Six Flags with an Equal Weight rating and $29 price target. The regional theme parks are "high-return businesses" with double-digit levered free cash flow per share growth, says the analyst, who sees an attractive risk/reward skew among the group with valuation "well below pre-pandemic levels, even relative to other consumer sectors." The firm’s bullish industry view is based on unique brands, high barriers to entry, and complementary footprints, the analyst added. However, while the firm sees upside potential at Six Flags, it also contends that the company’s recent strategic reset creates both opportunity and risks.