SIX - Keybanc calls Six Flags earnings 'indefensible' in downgrade

Six Flags ( NYSE: SIX ) continued to ride downwards in Friday’s premarket trading as Keybanc reduced its rating on the stock to a Hold-equivalent.

While the bank’s analyst Brett Andress lamented making a “reactionary downgrade”, but he explained that the surprisingly weak attendance and margins left him with no choice.

“The results were indefensible, in our view,” he wrote. “In this tape/macro backdrop, we do not think patience is abundant, and management is likely to be stuck talking into the void until it gets another shot at proving this out next season.”

Andress downgraded the stock to “Sector Weight” after the disappointing results, voicing a lack of confidence in management moving forward. In particular, he questioned the credibility of CEO Selim Bassoul at the present moment.

“Forgive us for not giving Selim more time to execute here, but this whole endeavor/strategy was pitched as bold to begin with, and in hindsight, we think we all would have been better off had expectations been gutted in the first place, not in the middle of summer,” Andress commented. “Our fear now is that there is no more pricing power to push on these assets, that we've hit the limits of what consumers are willing to pay to experience them.”

Alongside the downgrade, Andress assigned a $40 price target to the stock in a “bull case” while projecting a $17 price target in a more bearish scenario.

Shares of the Texas-based amusement park operator slid 1.52% on light volume in Friday’s premarket trading, adding to a 18.17% decline on Thursday.

Read the earnings call transcript .

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