Wells Fargo Lowers MTN Rating To Market Perform From Outperform

Wells Fargo is lowering its rating on shares of Vail Resorts, Inc. MTN to Market Perform from Outperform. “Our focus is purely valuation,” Wells Fargo writes. “We believe much of the news of this seasons' strength is priced into the shares and there is limited further upside potential at this time. “We estimate a 10% premium to Vail's long-term average multiple – consistent with lodging C-corps – implies just about 5% upside potential to MTN shares. In order to maintain an Outperform rating, we need the shares to trade at a 25% premium to their long-term average; a valuation we feel is less probable given peer valuations and the niche appeal of Vail's stock. “Raising our FY2011E to $1.08 from $1.05 in response to mid-season skier data and lowering FY2012E by $0.02 to $1.40. Maintaining target range at $52-55.” Vail Resorts currently trades at $51.53.