Please ensure Javascript is enabled for purposes of website accessibility

Why Six Flags, Cedar Fair, and Planet Fitness Stocks All Jumped Today

By Rich Smith – Apr 9, 2020 at 2:20PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's more than just government statements driving the market.

What happened

Shares of amusement park operators went on a wild ride Thursday, with the stocks of Cedar Fair (FUN 1.75%) and Six Flags (SIX 9.40%) up 13.6% and 19.9%, respectively, as of 1:30 p.m. EDT.

As we've come to expect these days, the big macroeconomic driver behind today's stock movements comes from someone in Washington, in this case, Federal Reserve Chairman Jerome Powell. He predicted today that because of "forceful measures to control the spread of the virus" taken by government, combined with a $2.2 trillion stimulus package and interest rate cuts to near zero, the U.S. economy is on track to resume "robust" economic growth just as soon as the coronavirus pandemic is brought under control, and the recession ends.  

Amusement park ferris wheel and merry-go-round glow in the dark

Image source: Getty Images.

So what

But government pronouncements aren't the only news having an effect today. This morning, shares of Six Flags got a lift from investment bank B. Riley FBR. As it explained in a note covered by, Wednesday's announcement that Six Flags is suspending its dividend and stock repurchases, and drawing upon a further $131 million in loans to keep itself afloat are evidence that the company has more liquidity than investors give it credit for.

Riley said it is feeling increasingly optimistic that Six Flags will make it through this crisis intact, and for this reason, it is raising its price target on the shares by 19%, to $15.50.

As you'd expect, of the three stocks named above, Six Flags is getting the biggest boost from the news. Still, investors appear to be extrapolating Riley's optimism regarding one amusement park operator to the others as well, helping to support share prices at Cedar Fair.

Now what

In other analyst news, shares of gym operator Planet Fitness (PLNT 6.43%) are also on the upswing today, gaining more than 10% on continued optimism after Wednesday's upgrade from D.A. Davidson, which hiked Planet Fitness shares to a buy rating with a $50 price target. Yet even after two days of price gains, the stock isn't quite there yet, and investors may be taking Davidson's words about the fitness company's "superior unit economics" to heart.

Davidson's assessment that weakness in the shares are a mere COVID-19 blip appears to line up well with Powell's commentary about an initial downturn turning into a robust economy a few quarters down the road. With analysts and government officials all in agreement, it's hardly surprising to see investors continuing to bid up these shares as well.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Planet Fitness. The Motley Fool recommends Cedar Fair. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Six Flags Entertainment Corporation Stock Quote
Six Flags Entertainment Corporation
$19.20 (9.40%) $1.65
Cedar Fair, L.P. Stock Quote
Cedar Fair, L.P.
$41.40 (1.75%) $0.71
Planet Fitness, Inc. Stock Quote
Planet Fitness, Inc.
$62.11 (6.43%) $3.75

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.