In a report released yesterday, Shaun Kelley from Bank of America Securities reiterated a Hold rating on Vail Resorts (MTN – Research Report), with a price target of $185.00.
Shaun Kelley has given his Hold rating due to a combination of factors related to Vail Resorts’ recent pricing strategy and market position. The company has announced a significant price increase for its Epic Day Passes, ranging from 25% to 30%, which could be attributed to the lack of competitive alternatives and an attempt to align more closely with the rising costs of window tickets. This strategic move is expected to generate approximately $95 million in additional high-margin revenue year-over-year, assuming the number of passes sold remains constant.
However, the increase in full Epic Pass prices by 7% appears to be in line with investor expectations and previous trends, suggesting that while there is growth potential, it may not be substantial enough to warrant a more aggressive rating. Additionally, the market is awaiting further pricing announcements from competitors like Alterra’s Ikon Pass, which could impact Vail Resorts’ competitive positioning. Given these factors, along with a current price objective of $185.00 compared to the trading price of $158.44, the Hold rating reflects a cautious stance as the market evaluates the impact of these pricing changes and awaits further developments.
Based on the recent corporate insider activity of 31 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of MTN in relation to earlier this year.