FUN: Activist And Real Estate Moves Will Drive Future Upside Potential

Analysts have trimmed their 12 month price target for Six Flags Entertainment from approximately $43.00 to about $38.11, citing slightly slower expected revenue growth, a modestly lower long run profit margin, and a reduced future earnings multiple outlook.

What's in the News

• A class action lawsuit alleges that the Six Flags and Cedar Fair merger registration statement misled investors about chronic underinvestment, degraded operations, and large undisclosed capital needs, with shares dropping from above $55 to about $20 after the deal (Robbins Geller Rudman & Dowd LLP, class action announcement).
• Six Flags recorded approximately $1.52 billion in goodwill and intangible asset impairment charges for the quarter ended September 28, 2025, compared with about $42 million a year earlier (company unaudited financials).
• JANA Partners and a coalition including Travis Kelce, Glenn Murphy, and Dave Habiger have built an activist stake, seeking to revamp branding and marketing, improve operations, reassess leadership, and explore acquisitions to enhance shareholder value and guest experience (JANA Partners statements).
• Land & Buildings Investment Management is pressing Six Flags to spin off or sell its theme park real estate, suggesting it could be worth up to $6 billion and arguing that a REIT structure or sale could unlock value following the poorly received Cedar Fair merger (Land & Buildings communication).
• Six Flags entered a cooperation agreement with Sachem Head Capital Management, expanding the board to 13 directors and appointing Jonathan Brudnick, with provisions allowing Sachem Head to propose a replacement if its ownership threshold is maintained (company governance announcement).

Valuation Changes

• Fair Value Estimate has fallen moderately, from about $43.00 to approximately $38.11 per share.
• Discount Rate has risen slightly, from roughly 12.32 percent to about 12.50 percent, implying a somewhat higher perceived risk profile.
• Revenue Growth has been cut meaningfully, from around 6.28 percent to roughly 4.89 percent, reflecting more subdued top line expectations.
• Net Profit Margin has edged down, from about 12.36 percent to approximately 12.21 percent, indicating slightly lower long run profitability assumptions.
• Future P/E Multiple has declined modestly, from roughly 13.48x to about 12.76x, signaling a more conservative valuation on expected earnings.