In Macau, gross gaming revenue (GGR) and visitation trends are showing modest signs of improvement.…
Posted on: Could 1, 2021, 12:54h.
Final up to date on: Could 1, 2021, 04:37h.
Todd Shriber Learn Extra
After hovering greater than 23 % this week, Century Casinos (NASDAQ:CNTY) is up 106 % year-to-date. That simply makes it one of many best-performing gaming equities.
Cripple Creek, Colo., residence to a Century Casinos venue. An analyst sees extra upside forward for the inventory. (Picture: Pinterest)
These simply now discovering the regional on line casino operator can take coronary heart, as a result of analysts see extra upside coming for the shares. Actually, it was analyst commentary that sparked a number of the inventory’s surge this week, as B. Riley’s David Bain initiated protection of the gaming fairness with a “purchase” ranking and an $18 value goal. That means appreciation potential of about 38 % from the April 30 shut.
CNTY’s properties are locals-based, which we imagine are benefiting from a number of drivers within the present surroundings, together with the vaccine drive and monetary stimulus,” mentioned Bain in a notice to purchasers.
These elements, coupled with the inventory’s ascent, verify analysts and traders are prizing Century for its US publicity, as a result of the shares are hovering even because the operator contends with short-term closures of venues in Canada and Poland.
Within the US, Century’s roster consists of a pair of casinos in its residence state of Colorado, in addition to Missouri and West Virginia.
Century Inventory May Be Moved by Acquisitions
Whereas Century’s portfolio of home properties is small in comparison with some rivals within the regional on line casino house, the operator is beloved by some analysts as a result of administration has a popularity for successfully integrating bolt-on acquisitions.
On the finish of final 12 months, the corporate had $63.4 million in money available, and with Century inventory hovering, it has foreign money to buy groceries. Plus, there’s the extensively anticipated sale of its Poland belongings, which ought to usher in additional money for deal-making. B. Riley’s Bain says the gaming firm may imminently return to its acquisitive methods, and that might probably set off greater than doubling of the share value.
“CNTY represents a scarce on line casino operator worth play that might probably double earnings earlier than curiosity, taxes, depreciation, amortization, and restructuring or lease prices (EBITDAR) by way of home acquisitions by CY23E, creating per-share worth of over $28, in our view,” mentioned the analyst. “We imagine CNTY’s subsequent US on line casino acquisition will likely be introduced earlier than the top of 3Q21, creating an estimated per-share worth of $4, not mirrored in our value goal.”
Bain says Century is probably going reviewing “a number of US regional on line casino acquisition alternatives,” however he didn’t get into specifics.
Extra Catalysts for Century Inventory
One other imminent catalyst for Century is implementation of upper betting limits and introduction of latest desk video games in Colorado. That happened by way of passage of Modification 77 final November, and analysts and operators imagine the removing of the $100 bet cap will assist casinos within the state seize a longer-staying, higher-end clientele.
One other benefit for Century is that its home venues are closely frequented by locals — demographics that need to spend stimulus money and get out of the home after getting coronavirus vaccinations.
“We imagine locals casinos are at present benefiting from pent-up demand, elevated capability allowances, the COVID vaccine rollout (driving a key older demographic again to the on line casino), close-to-home leisure, fiscal stimulus, and structural margin augmentation,” mentioned Bain.
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