SeaWorld bulls aim to overcome whale row

Shares of SeaWorld Entertainment made a splash after analysts at Goldman Sachs upgraded the theme park operator, arguing that the brand can regain favour among consumers.

The number of SeaWorld bulls on Wall Street rose to 6, after analysts at Goldman Sachs upgraded the stock to "buy" from "neutral" and raised their price target to $26 from $18, noting that it will benefit from positive leisure travel trends this year.

The Florida-based company has been hurt by lower attendance after the release of Blackfish, a 2013 documentary that criticised the theme park operators treatment of captive orca whales.

"Our upgrade is predicated on our view that the SeaWorld brand can regain a place in the consumer's mindset," said Afua Ahwoi, an analyst at Goldman Sachs. "In other words, we do not think attendance will decline in perpetuity."

Ms Ahwoi said Joel Manby, who was appointed chief executive in March, has a good understanding of the challenges faced by the company, and "has experience improving brands, most notably from his work in the auto industry".

She said trends at SeaWorld had improved even before Mr Manby took charge, with attendance at SeaWorld branded parks improving by about 200 basis points sequentially in the fourth quarter.

The company is also expected to benefit from positive leisure travel trends in 2015 as lower petrol prices and higher minimum wages lift consumer spending.

Shares of SeaWorld Entertainment, which declined 24 per cent in the past year, rose 5 per cent to $22.60.

Shares of Applied Materials, a maker of semiconductor equipment declined 6 per cent to $20.50, after the Department of Justice blocked its merger with Japanese rival Tokyo Electron.

The all-stock merger, which would have valued the combined company at about $29bn, was first announced in 2013.

On completion, Applied Materials shareholders were expected to own about 68 per cent of the new company and Tokyo Electron shareholders approximately 32 per cent.

On Sunday, however, the companies said US officials had rejected the remedies they had proposed to secure approval of the merger, which would have given the combined company 25 per cent of the total equipment market.

"The stock is down because the merger with Tokyo Electron would have boosted earnings by 30 per cent plus through a combination of expense synergies, a lower tax rate and share count," said Romit Shah, an analyst at Nomura.

The market had previously assumed the merger would be approved, he added.

Shares of Restaurant Brands International, which owns Burger King as well as Tim Hortons, gained nearly 2 per cent to $42.27 after the burger chain's sales were lifted by changes to its menu and its '2 for $5' promotion.

The company said same-store sales at Burger King in the US and Canada climbed 6.9 per cent in the first quarter. Overall, same-store sales at Burger King rose 4.6 per cent in the first quarter.

The news came alongside a loss of $8.1m or 4 cents a share on sales of $932m. Adjusting for one-time items, the company reported earnings of 18 cents a share ahead of forecasts.

The S&P 500 materials sector led the benchmark index as stocks fluctuated near record levels.

The S&P 500 gained 0.2 per cent to 2,121.03, the Dow Jones Industrial Average rose 0.3 per cent to 18,127.15 and the Nasdaq Composite rose 0.1 per cent to 5,098.37.

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