Pinnacle Entertainment, Inc., which owns 15 regional casinos, reported improved results Monday for the first quarter of 2016, and analysts also like their future, citing improved market share and the recent acquisition of a Pittsburgh racetrack.
This quarter’s revenues will be at $577 million to $583 million, the company said Monday. That’s a turnaround from last quarter’s results, announced Feb. 11, which were slightly under expectation. The company reported revenue of $558.4 million at that time.
“We view this preliminary result as a big positive, particularly given where valuation currently stands,” reported Chad Beynon, a market analyst with Macquarie Capital.
The Las Vegas company is known for its Ameristar, Belterra and Boomtown brands, and has four casinos in Louisiana and others in Colorado, Indiana, Iowa, Louisiana, Mississippi, Nevada, and Ohio.
In March, Pinnacle Entertainment agreed to pay $138 million for the operations of the Meadows Racetrack in Pittsburgh from Gaming & Leisure Properties. The investor site the Motley Fool also reports that Moody’s is placing the company’s debt on review for upgrade.
“PNK has been our top regional gaming pick for over three years,” Macquarie’s Beynon also wrote in a report. “And we believe the recent competitor upgrades in addition to current fundamentals and valuation highlight that PNK remains a top name to own in the universe.”
Pinnacle has reported market share gains in several markets, including Ameristar East Chicago and Belterra Park (Cincinnati, Ohio). In Lake Charles (La), despite new competition coming on in December 2014, 2015 Revenues fell only 8 percent. The company estimates that revenues could have been another $2.9 million higher, but the Lake Charles (La.) casino had to close for four days because of nearby flooding.
The stock is currently at $36.28, but Macquarie puts it at $41 and other analysts are within $1 either way.
