On Sep 16, Zacks Investment Research upgraded Vail Resorts Inc. (MTN) to a Zacks Rank #1 (Strong Buy) following its recent acquisition of Park City Mountain Resort from Powdr Corp.
Why the Upgrade?
Last week, Vail Resorts announced the acquisition of Park City Mountain Resort – located in Utah – from Powdr Corp. for $182.5 million in cash. The deal also brings a marathon legal battle between Vail and Powdr to an end, thereby allowing Park City to operate normally this ski season.
As part of the acquisition, Vail Resorts will get all the assets of Greater Park City Company (:GPCC) which includes the land used as ski terrain as well as for parking, lift ticket offices and other activities for a functioning ski resort. The base also has zoning approval for almost 700,000 square feet of residential and commercial development.
Also, Vail Resort intends to connect its neighboring resort, Canyons, with Park City Mountain beginning the 2015-16 season, making the combined entity the largest resort in the U.S. The Park City Mountain, which reportedly accounts for a large percentage of Utah’s annual skier visits, will add to Vail Resorts’ revenues, besides establishing a strong market share in a lucrative market.
We believe that the deal will be beneficial for Vail Resorts as it adds yet another primary, well-known property to its portfolio. Further, the company expects the acquisition to provide significant tax benefits over the next 15 years.
This bullish long-term outlook related to the acquisition triggered an uptrend in the Zacks Consensus Estimate, as analysts became more bullish on the stock’s future performance. This is evident from the upward movement witnessed in the Zacks Consensus Estimate for 2015, which rose 14.2% to $2.09 for 2015. Additionally, the long-term earnings growth forecast for the company is 18.6%. Hence, these factors led to the rank upgrade.
Other Stocks to Consider
Apart from Vail Resorts, the other stocks worth considering in the same industry include Royal Caribbean Cruises Ltd. (RCL), Carnival Corporation (CCL) and Diamond Resorts International, Inc. (DRII). While Royal Caribbean sports a Zacks Rank #1 (Strong Buy), Carnival and Diamond Resorts have a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment