Shares of Vail Resorts (MTN) saw a 7.6% increase for the day following the announcement of solid second-quarter results in fiscal 2025. Skier visits exceeded expectations with a growth of 6.8% despite challenging early season conditions, while earnings per share surpassed estimates. The company’s Q2 EBITDA of $458 million exceeded analyst and Street expectations. As for the future, Vail Resorts reaffirmed its full-year EBITDA guidance, indicating more solid performance on the horizon. Yet, analyst response has been less than enthusiastic, lowering price targets for the next 12 months.
Revenue Ascending
Vail Resorts is a major operator of mountain resorts and regional ski areas, with operations extending across the United States and internationally.
The company reported a net income of $245.5 million for the second quarter of fiscal 2025, an increase from $219.3 million in the same period of the previous year. Reported EBITDA was $459.7 million, factoring in $2.9 million in one-time costs tied to a two-year resource efficiency transformation plan and $0.1 million for acquisition and integration-related expenses. This marked an improvement over the previous year’s EBITDA of $425.0 million.
The company has revised its guidance for the fiscal year 2025, with expectations for net income to be in the range of $257 million to $309 million. The EBITDA forecast for the year ending July 31, 2025, remains the same as the original guidance despite a $7 million impact due to foreign currency fluctuations. The updated EBITDA is projected to range between $841 million and $877 million.
The company’s Board of Directors declared a quarterly cash dividend of $2.22 per share of Vail Resorts’ common stock, to be paid on April 10, 2025. The company also repurchased 0.1 million shares during the last quarter at an approximate total cost of $20 million.
Analysts Take a Cautious View
Analysts’ response to the recent announcement has been cautious in tone. Morgan Stanley analyst Megan Alexander has reduced the price target for Vail Resorts shares from $197 to $178 while maintaining an Equal Weight rating. She noted that the outlook by management, combined with expected investor uncertainty about visitation re-acceleration, may continue to affect the stock negatively.
Additionally, Barclays’ Brandt Montour has also lowered its price target for MTN stock from $165 to $152 and confirms an underweight rating following the fiscal Q2 report, noting that the anticipated back-end improvement against the current unsettled consumer backdrop indicates that the outlook is not entirely risk-free.
Vail Resorts is rated a Hold overall, based on the recent recommendations of eight analysts. The average price target for MTN stock is $178.67, which represents a potential upside of 8.01% from current levels.
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