Six Flags Entertainment's (FUN) recovery path in 2026 depends largely on rebuilding attendance, with visibility on the recovery timing still limited, Morgan Stanley said in a note Friday.

The firm said 2025 adjusted EBITDA fell 20% year-over-year, as declines in attendance and higher expenses offset stronger per capita growth.

Morgan Stanley noted a recovery will rely on improved attendance in the May and June operating season, while the company works with narrow operating windows across its park portfolio.

Margin outlook could improve with a focus on reallocating suboptimal investments made last year and balanced spending targeting revenue growth, according to the note.

The firm modestly raised its 2026 and 2027 adjusted EBITDA forecasts by about 3%, driven by a slightly improved outlook for in-park per-guest spending.

Morgan Stanley maintained its equal-weight rating on Six Flags, and raised its price target to $18 from $17.

Price: 17.16, Change: -0.42, Percent Change: -2.42