SeaWorld Jumps as Credit Suisse Upgrades to Outperform

SeaWorld shares jumped as the marine-theme-park operator was upgraded to outperform from neutral by analysts at Credit Suisse.
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Shares of SeaWorld Entertainment  (SEAS) - Get Report jumped Tuesday after Credit Suisse analysts raised their rating on the marine-theme-park operator to outperform from neutral. 

Analysts at the investment firm also more than doubled their price target to $30 a share from $13. 

SeaWorld shares at last check rose 2.6% to $21.07. Earlier on, before a late-day drop in the broad market, shares of the Orlando, Fla., company were trading up as much as 8.3%.

The stock is down 44% from its 52-week high near $37, set in mid-February. They have tripled off the 52-week high, set just a month later.

"SEAS is in a good position to benefit from a news-flow perspective should travel restrictions continue to loosen (e.g., California and Orlando), largely operating year-round parks," Credit Suisse said in a note. 

The major headwinds are already priced into SeaWorld's shares, according to analyst Benjamin Chaiken, who is now "more constructive on a stock with relatively low expectations."

Those headwinds include the company's exposure to Orlando and the backlash from the negative media concerning the park's treatment of its star attractions, the orca whales. 

Credit Suisse had initiated coverage of the company in May with a neutral rating, but the circumstances that justified the conservative rating have changed, the analyst said.

Part of the new positive thesis for the company stems from delay in the construction of Universal's newest theme-park attraction Epic Universe until possibly 2024 or 2025.

Credit Suisse also sees "renewed potential" for cost savings at SeaWorld.