Why Six Flags Entertainment (FUN) Is Up 8.7% After Refinancing Debt And Pushing International Growth

• Six Flags Entertainment has issued US$1.00 billion of 8.625% senior unsecured notes due 2032 at par, utilizing the proceeds and money readily available to completely redeem its 5.375% and 5.500% senior notes maturing in April 2027, whereas persevering with post-merger portfolio reshaping and worldwide park growth similar to Six Flags Qiddiya City.
• This refinancing extends the corporate’s debt maturity profile at a better coupon whereas its park closures, potential “Enchanted Parks” rebrand, and abroad development present a broad reshaping of the enterprise after the Cedar Fair merger.
• We’ll now study how changing the 2027 notes with longer-dated 2032 debt might affect Six Flags’ funding narrative and danger profile.

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Six Flags Entertainment Investment Narrative Recap

To personal Six Flags immediately, it is advisable consider the merged firm can flip a fancy, extremely leveraged park portfolio right into a extra targeted, greater incomes community of locations. The new US$1.00 billion 8.625% 2032 notes prolong its debt runway however lock in a better curiosity burden, so the important thing close to time period catalyst stays merger and portfolio execution, whereas the largest danger is that elevated leverage and curiosity prices restrict flexibility if working circumstances soften.

The latest grand opening of Six Flags Qiddiya City in Saudi Arabia is very related right here, because it exhibits the corporate already pushing past its traditionally North America heavy footprint. That type of worldwide growth sits alongside park closures and potential “Enchanted Parks” rebrands as sensible exams of whether or not the merger pushed reshaping can assist earnings and assist handle the bigger debt stack over time.

Yet traders additionally want to pay attention to how rising curiosity prices might work together with already excessive leverage if…

Read the total narrative on Six Flags Entertainment (it is free!)

Six Flags Entertainment’s narrative tasks $3.7 billion income and $269.4 million earnings by 2028. This requires 5.0% yearly income development and a $753.0 million earnings enhance from $-483.6 million immediately.

Uncover how Six Flags Entertainment’s forecasts yield a $26.08 truthful worth, a 64% upside to its present worth.

Exploring Other Perspectives

Four members of the Simply Wall St Community at present place Six Flags’ truthful worth between US$23 and about US$58, exhibiting large disagreement on upside. You ought to weigh these views in opposition to the corporate’s elevated leverage and curiosity expense, which might affect how any turnaround in operations in the end flows by to shareholders.

Explore 4 different truthful worth estimates on Six Flags Entertainment – why the inventory is perhaps price simply $23.00!

Build Your Own Six Flags Entertainment Narrative

Disagree with current narratives? Create your individual in underneath 3 minutes – extraordinary funding returns hardly ever come from following the herd.

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