Vail Resorts stock downgraded
VAIL, Colorado ” A Wall Street analyst downgraded Vail Resorts stock from “buy” to “hold” in a note to investors Tuesday.
Jeffrey Donnelly of Wachovia said he made the change in light of rising unemployment in the financial services sector, the strengthening dollar and higher air travel costs. Donnelly said he’s not sure that Vail Resorts’ discounts, including the new Epic Pass, will bring more visitors to the company’s resorts.
“Historically, U.S. and Rocky Mountain skier visits have shown little to no relationship with select economic variables ” GDP, person income, highest 20 percent personal income, stock market performance,” the note said. “However, given the ‘historic nature’ of the current environment, we expect even the most dedicated skiers may prove more budget conscious.”
Wachovia said it expects Vail Resorts to offer a cautious outlook when it releases its year-end results Sept. 25.
“While we have found there to be limited correlation between changes in economic variables and skier visits, and we believe mountain real estate is more insulated from the U.S. real estate downturn, we believe the current environment could prove challenging for Vail,” the note said.
Broomfield-based Vail Resorts owns Vail, Beaver Creek, Breckenridge, Keystone and Heavenly. It also owns and runs hotels and resorts across the West and the Caribbean.
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