Source: Tony Dante
Morgan Stanley’s Bearish Outlook for Vail Resorts
In a move that may surprise some investors, Morgan Stanley, one of the leading global financial services firms, has set a rather bearish price target of $146 for Vail Resorts Inc. (NYSE:MTN). With MTN’s stock trading at $155.42 at the time of this prediction, this target indicates a potential decline of about 6.06% in the stock price.
It is worth noting that this forecast from Morgan Stanley comes in spite of the recent strong earnings performance by Vail Resorts. Morgan Stanley’s stance may be influenced by a number of factors, including the shifting dynamics of the mountain resort industry, the company’s recent revenue challenges, and potential risks in the broader market.
Overview of Vail Resorts
Vail Resorts is a preeminent player in the global mountain resort industry. The company operates a portfolio of world-class resorts, known for their quality skiing experiences, premium lodging services, and other mountain-related activities. These resorts are in fierce competition with other major players, such as Aspen Skiing Company and Alterra Mountain Company.
Vail Resorts’ Fiscal Q3 2025 Performance
Despite the bearish outlook from Morgan Stanley, Vail Resorts’ performance in the third quarter of fiscal 2025 was quite robust. The company reported an impressive earnings per share (EPS) of $10.54, indicating a strong profit margin. This was a noticeable increase from the previous year’s EPS of $9.54.
However, despite the robust EPS, the company’s revenues were not as impressive. It reported a 7% decline in visitation and a 4.8% drop in lodging revenues, which contributed to the overall revenue falling short of estimates.
Resilience in Season Pass Revenues
Despite the decline in visitation and lodging revenues, Vail Resorts showed resilience in its business model. The company reported a 2% increase in season pass revenues, in part due to a 7% price increase for the 2025-2026 season. This suggests that despite facing multiple challenges, Vail Resorts has been able to maintain a steady revenue stream from its season pass program.
CEO Rob Katz emphasized this point, noting that total resort net revenues, excluding the newly acquired Crans-Montana property, remained steady compared to the previous year.
Market Reaction to Vail Resorts’ Performance
The market’s reaction to Vail Resorts’ performance was mixed. Despite the earnings beat, the company’s stock fell by 1.3% in after-hours trading. This may reflect investor concerns over the revenue shortfall and the decline in visitation.
As of now, MTN’s stock is priced at $149.47, reflecting a decrease of 3.51% or $5.44. On the day, the stock has traded between a low of $147.53 and a high of $155.25. Over the past year, MTN has reached a high of $199.45 and a low of $129.85. The company’s market capitalization is approximately $5.58 billion, with a trading volume of 1,014,166 shares on the NYSE.
Conclusion
While Morgan Stanley’s outlook may seem concerning for some investors, it’s crucial to remember that stock markets are inherently unpredictable and influenced by numerous factors. Despite the challenges, Vail Resorts’ ability to increase season pass revenues amidst a decline in visitation and lodging revenues speaks volumes about the company’s resilience and the strength of its business model.