Shares of bowling company Bowlero could surge more than 50% as demand for events increases in a post-pandemic world, according to JPMorgan. Analyst Kevin Heenan initiated coverage of Bowlero with an overweight rating, citing many factors driving growth at the company. Bowlero made its public debut in December 2021 by way of a merger with the special purpose acquisition company Isos, a transaction for which JPMorgan was an underwriter. Bowlero has “(1) market leadership/scale in the economically-attractive bowling industry, (2) structural P/L improvements with tailwinds exiting the pandemic, (3) a balanced multi-year financial profile (+HSD-LDD% revenue/EBITDA growth) with potential P/L upside, and (4) experienced, founder-led management (CEO/CFO > 20 year tenures),” Heenan wrote in a Tuesday note. Shares of Bowlero are up 23% this year, far outpacing the three major averages, but the analyst believes they have further upside from here. Heenan believes the company can generate roughly 10% annual revenue growth as it grows its business and events demand recovers from the throes of the pandemic. “We see multiple sources of near-term and multi-year upside to our model, including: (1) Events recovery (~20% of mix): modeling F4Q22 (Apr-Jun qtr) center revenue +28% to pre-pandemic (= in-line q/q and ~30pts below April/early May +60% tied to Events inflection, with our work pointing to ongoing recovery notably corporate); (2) ABC acceleration: modeling 4% unit growth or low-teens new centers/year,” the note read. The analyst set a $17 December 2023 price target, meaning the stock could surge 52.9% from Monday’s closing price of $11.12 per share. To be sure, the bowling company could get hurt by broader economic factors such as lower consumer discretionary spending or a resurgence in the Covid-19 pandemic. Still, Heenan pointed out the company’s experienced management team, as well as its leading position in the bowling industry. With 8% of bowling centers in the U.S., Bowlero is the largest operator; the next four competitors have a combined market share of 2%. Meanwhile, CEO Tom Shannon and CFO Brett Parker having worked together for more than two decades. “Said another way, Bowlero is unique, with unmatched scale yielding material P/L benefits tied to two key economic traits of the industry: (i) ~2/3 of revenue comes with essentially no variable costs (bowling & amusement), driving material operating leverage on incremental visits/games; and (ii) ~90% market share is captured by local independents,” the note read. —CNBC’s Michael Bloom contributed to this report.