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William Blair & Company Initiates Coverage of Four Outdoor and Recreation Companies

Friday, July 21, 2017

William Blair & Company initiated research coverage of four companies in the outdoor and recreation space: Vail Resorts, Inc. (MTN $203.98), Live Nation Entertainment, Inc. (LYV $35.70), Six Flags Entertainment Corporation (SIX $57.01), and AMC Entertainment Holdings, Inc. (AMC $20.10).

Analyst Ryan Sundby is focusing on companies offering consumer experiences. Sundby said, “As millennials enter their earnings prime, they are choosing to spend their time and money on experiences, which research has shown can create higher and more enduring levels of happiness than possessions. This change in behavior—which is not limited to just millennials—is being driven by factors including increased adoption of social media, the development of the sharing economy, and a need for consumers to connect on a social level in an increasingly digital world.”

Sundby continued, “As the leader in mountain resort operations, Vail is well positioned to benefit from an increased appetite for experiences, and its premium positioning and economies of scale allow it to reinvest in its properties and expand terrain and amenities to improve the overall guest experience. Live Nation is the leader in the live music industry. While demand for recorded music has come under pressure, live music has thrived, growing at a compound annual rate of 10% over the past 15 years. The Six Flags brand is well known and often synonymous with the theme park industry. This segment offers strong value relative to other forms of entertainment, appeals to families with compressed timelines, and is positioned to benefit from the preference for experiences over goods. Finally, AMC’s target markets represent about half of all global box office receipts and have combined to achieve record box office results in four of the past five years. AMC maintains superior brand equity and theater productivity metrics, supported by unmatched levels of investment. This has positioned it to be the leader in premium seating and technical innovation, helping transform moviegoing into a differentiated entertainment experience, in our view.”

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William Blair or an affiliate does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. This report is not intended to provide personal investment advice. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments, or strategies to particular clients. The recipient of this report must make its own independent decisions regarding any securities or financial instruments mentioned herein.

William Blair or an affiliate is a market maker in the securities of AMC Entertainment Holdings, Inc., Live Nation Entertainment, Inc., Six Flags Entertainment Corporation, and Vail Resorts, Inc.

William Blair or an affiliate expects to receive or intends to seek compensation for investment banking services from AMC Entertainment Holdings, Inc., Live Nation Entertainment, Inc., Six Flags Entertainment Corporation, and Vail Resorts, Inc. or an affiliate within the next three months.

Officers and employees of William Blair or its affiliates (other than research analysts) may have a financial interest in securities of AMC Entertainment Holdings, Inc., Live Nation Entertainment, Inc., Six Flags Entertainment Corporation, and Vail Resorts, Inc.

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Outperform (Buy): 59%
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