Bear Stearns downgraded Six Flags (PKS ) to underperform from peer perform.
Analyst Glen Reid says with Six Flags' stock up almost 20% year-to-date, investors should look to the sidelines. He notes very little visibility into the third quarter; he can't rule out the potential for a pick-up in trends, particularly against easy comparisons, but he thinks the risk outweighs the reward, given the setback, on the back of very difficult weather throughout most of the second quarter to date.
Reid says valuation is stretched, especially for such a low return, highly leveraged business. He cut the $129.8 million second-quarter EBITDA estimate to $121.1 million, and cut the $398.7 million 2003 estimate to $390 million due to poor weather in the second quarter. Furthermore, Reid cut the second-quarter earnings per share estimate to seven cents; he sees $1.15 per share for 2003, and $1.55 per share for 2004.