Barclays analyst Felicia Hendrix initiated coverage of SeaWorld Entertainment Inc. on Friday, saying that the theme park has a "sea of opportunity" ahead.
THE OPINION: The analyst said in a research note that SeaWorld is well positioned to grow its earnings and return capital to shareholders in the coming years.
Hendrix pointed to the company's strong brands and intellectual property, as well as its capital spending levels, saying that these could help increase revenue and improve cash flow.
Attendance at SeaWorld parks was 1 million guests lower in 2012 than at its peak levels, the analyst said. That suggests that the company has significant room for growth, and she expects a combination of new season pass products, multipark tickets and pricing could drive those gains.
The analyst gave SeaWorld's stock an "Overweight" — or "Buy" — rating and $40 price target.
SeaWorld, based in Orlando Fla., is best known for its water shows featuring killer whales and dolphins. The company reported last week that its first-quarter loss narrowed thanks to a double-digit jump in revenue.
THE STOCK: Shares of SeaWorld increased 2 cents to $35.62 by early afternoon. Its stock has traded between $30.26 and $39.65 since its initial public offering in April.