Casinos & Hotels

Credit Suisse Sees Huge Upside in Cruises and Theme Parks

Jon C. Ogg

The entertainment sector, particularly travel and leisure, can be fun to be involved in and can be great fun for consumers. That being said, sometimes it can be a hard sector for investors to make profits. After all, a theme today does not always stay popular, and the overhead is generally considered high. It turns out that Credit Suisse has issued very favorable coverage on the cruise line and theme parks on Tuesday.

Credit Suisse’s Ben Chaiken assumed coverage of many cruise line and theme park owners and operators with Outperform ratings. Investors need to consider that Credit Suisse’s coverage technically is not making changes to the firm’s prior price targets and earnings estimates. Some investors might even consider these as “reiterated calls” rather than brand new coverage, at least until they see the implied upside here.

Credit Suisse’s Outperform ratings are generally considered as an outperform against other peers rather than in broad market performance, but investors could be handed big upside if Chaiken’s sector view proves right.

Here is how much upside Credit Suisse thinks you can make off of cruises and theme parks.

Carnival Corp. (NYSE: CCL) was started as Outperform and was given a target price of $60.00. This was versus a $47.96 prior close, implying 25% upside, before considering the dividend yield of about 2.5%. Carnival has a consensus analyst price target of $60.06 and a 52-week trading range of $40.52 to $55.77. So far in 2016, the stock is down 11%, with a total market cap of $38 billion.


Royal Caribbean Cruises Ltd.

(NYSE: RCL) was started as Outperform with a price target of $100.00. With a prior close of $74.37, that implies upside of better than 34%, even before considering the 2% yield. Shares of Royal Caribbean have a consensus price target of $93.60 and a 52-week range of $64.21 to $103.40. The stock is down 26% year to date, with a total market cap of $17 billion.

Norwegian Cruise Line Holdings Ltd. (NASDAQ: NCLH) was started as Outperform with a price target of $71.00. Its prior close of $49.84 would imply upside of 44%, if Credit Suisse is right here. Norwegian Cruise Line shares recently traded at $49.82, with a consensus price target of $63.38 and a 52-week range of $37.01 to $64.27. So far in 2016 the stock is down 16%, with a total market cap of $11 billion.

Six Flags Entertainment Corp. (NYSE: SIX) was started as Outperform with a price target of $61.00. If Credit Suisse is right, this implies upside of about 20% from the $50.86 close, but then there is a 4.5% yield to consider. Six Flags shares were trading at $51.08, with a consensus analyst target of $57.19 and a 52-week range of $41.60 to $55.35. The stock is down 6% year to date, with a total market cap of $5 billion.

Vail Resorts Inc. (NYSE: MTN) was started as Outperform with a price target of $140.00, implying some 9.9% upside, before considering a 2% yield. Shares were trading at $128.11, with a consensus price target of $138.00 and a 52-week range of $84.56 to $133.59. The stock is flat year to date, with a total market cap of $5 billion.

Cedar Fair L.P. (NYSE: FUN) was started as Outperform with a price target of $65.00 in the Credit Suisse call. This implies some 10% upside from the prior $58.94 close, before considering a yield north of 5%. Shares were trading at $57.73, with a consensus price target of $64.00 and a 52-week range of $48.46 to $60.64. So far in 2016, the stock is up over 5%, with a total market cap of $3 billion.

SeaWorld Entertainment Inc. (NYSE: SEAS) was started as Outperform with a price target of $27.00 at Credit Suisse. Given an $18.09 prior close, that implies upside of 49%, before even considering a dividend yield north of 4%. Shares of SeaWorld were trading at $18.07, with a consensus price target of $21.42 and a 52-week range of $16.86 to $22.68. The stock is down 7% year to date, with a total market cap of $2 billion.

Intrawest Resort Holdings Inc. (NYSE: SNOW) was started as Outperform in Credit Suisse’s call. The firm’s price target of $12.00 would imply upside of 40%. Shares of Intrawest Resorts were trading at $8.48, with a consensus analyst target of $12.00 and a 52-week range of $6.95 to $12.75. So far in 2016, the stock is up 9%, with a total market cap of $336 million.