Craig-Hallum keeps a Buy rating on Viad (VVI) with a price target of $50 after the company announced it is selling GES for $535M to Truelink Capital. The firm thinks Viad is a stock that needs to be bought after the sale of its experiential marketing business. The crown jewel of Viad has always been Pursuit (PRSU), a collection of world class tourism assets in the Canadian Rockies and other remote regions, but the company never got a full valuation in the public markets because it was buried inside a larger company, Craig-Hallum argues, adding that GES is a high-quality business that generates consistent cash flow, but it is a less exciting, lower-growth business than Pursuit, and the two segments are completely unrelated with no real synergies beyond some back-office consolidation. The firm sees substantial opportunity for upside to its estimates for Pursuit following the wildfire in Jasper, AB this summer, and expects the standalone company to garner premium valuation over time as the value of its assets and durability of its growth strategy become obvious to investors.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
