SeaWorld Entertainment Inc. was upgraded to neutral from sell at Goldman Sachs Tuesday as the analysts see the company's risk/reward profile as more balanced after the stock has pulled back. SeaWorld still has many challenges, including competition and weak international visitation, but the analysts say SeaWorld's planned attractions for 2017 and 2018 should bring in more visitors, particularly as the pricing is below that of their peers. Additionally, the company has already factored these challenges into its fiscal 2017 guidance and investors are prepared for a second-quarter earnings miss, they say. With shares pulling back in the past three months, the company's valuation looks more reasonable, according to the analysts. Shares of SeaWorld have fallen 12% in the past three months, while the S&P 500 has gained 5%. With the share pullback, there is also greater possibility of an acquisition, particularly with SeaWorld's Busch Gardens. The analysts reiterated their $16 price target. The average FactSet rating on SeaWorld is overweight with a $19.75 price target.
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