Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Dan Politzer of J.P. Morgan looked at Caesars prospects on May 15:
“We continue to think a potential Caesars takeout in the low/mid-$30s range is rational and achievable. With further detail on a potential deal structure emerging in recent weeks, we refresh our Caesars takeout math. According to the Financial Times and Bloomberg, Tilman Fertitta is reportedly planning to acquire Caesars, with indications that Caesars’ management team may join the deal by rolling some/all of their equity stakes so as to share more directly in Caesars’ attractive free cash flow profile. Recall, Tilman Fertitta owns Landry’s Entertainment and Golden Nugget casinos; he also considered acquiring Caesars in 2018 (pre-Eldorado). While a potential deal is still “several weeks away and there [are] still significant hurdles to overcome,” investors have become antsy, as the negotiating window has been extended and interest rates have recently moved higher.”
David Bain of Texas Capital Securities looked at the first quarter for Gambling.com on May 15:
“Gambling.com missed 1Q due to 1) bad hold/luck in its revenue share segment and 2) an increase in non-SEO mix, which weighed on margins. Sentiment surrounding the gaming SEO industry is low – and expectations into the print were equally low, in our view. However, Gambling.com’s consistently lowered guidance is unlikely to inspire a valuation/sentiment shift in the relative near-term. Still, with shares trading below $3 per share in pre-market, down close to 30%, versus indications for the S&P to open down 1%, the share price decline is likely overdone to the downside, particularly in-light of still solid free-cash-flow generation characteristics and upcoming earnings upside, in our view.”
David Katz of Jefferies on May 16 viewed prospects for Monarch Casino Resorts:
“Our May 15 investor meetings with Monarch Casino Resorts management was categorically constructive. M&A is now the preferred growth avenue, with the most attractive environment in years. While organic growth — especially in Reno — remains, external deals offer higher returns, supported by balance sheet flexibility and disciplined capital allocation. The prospects for a levered acquisition near term are balanced by downside support from capital returns and internal growth. Reiterate Hold.”
Truist Securities’ Barry Jonas weighed in on Brightstar Lottery on May 12:
“Brightstar Lottery Q1 EBITDA was +2% above our estimate and in-line with the Street. Results were driven by strong international land-based results along with global ilottery, while U.S. land-based continues to be hurt by limited Powerball/MegaMillions jackpots. Brightstar Lottery reaffirmed its 2026 guidance, adding that Q2 is expected to be modestly down year-over-year, followed by a second half ramp. Net-net, we continue to see Brightstar as attractive at current valuation (~6x 2026E EBITDA/ ~7.5% dividend yield) but struggle to see valuation upside until a clear catalyst drives increased investor interest. We tweak cadence but make no major changes to full-year estimates. We move our price target to $14 (from $17) now based on ~6.5x EBITDA.”
