Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
David Katz of Jefferies explored Churchill Downs’s prospects October 25:
“The most actively discussed name this past week was Churchill Downs on myriad matters,” Katz wrote, “although the announced Visa sponsorship of the Kentucky Derby is a prominent issue. Our estimate is that the deal likely approximates a $3-8 million payment with wider benefits from sponsorship engagement. We view the deal positively, given the appetite for additional high-end sponsorship partners at the event. As well, focus is on whether management would have any update on its announced regional asset sale process into this week’s earnings release. We believe there will not likely be a substantive update and any prospective weakness in the shares is misplaced and a buying opportunity.”
David Bain of Texas Capital Securities examined Boyd Gaming October 23:
“Following Boyd’s in-line 3Q26 EBITDA result, we lower our 2027E Las Vegas Locals EBITDA forecast by 2%, which is completely offset by a 1% increase in our Midwest and South (MW&S) estimates,” Bain wrote. “Despite more EBITDA contribution from its Midwest and South segment, we believe Boyd’s Las Vegas Locals trends generally dictate stock sentiment. Our reduced Locals estimates capture a hedged outlook after acute summer seasonality, in our view. We do not see a substantive change in underlying demand or new competitive dynamics in the segment, however. We model 4Q26E company-wide EBITDA to be flat year-over-year following five sequential quarters of negative EBITDA growth. We forecast full company (and Las Vegas Locals) EBITDA growth beginning in 1Q27E and sustaining through 2028E. We believe a return to EBITDA growth is a key catalyst for Boyd’s potential stock rerating, and valuation currently sits near all-time lows. Maintain Buy.”
Truist Securities’s Barry Jonas October 20 discussed gaming industry prospects:
“While the Standard & Poor is up +12% year-to-date, the consumer sector and gaming particularly is out of favor,” Jonas wrote. “Still, there are bright spots: regional fundamentals, locals resiliency and Digital B2B visibility. But macro challenges remain for the (Las Vegas) Strip/Macau while digital still has prediction market uncertainty. We expect limited Q3 beats (Penn Entertainment, Red Rock Resorts and Genius Sports have the best shot), but think the focus will also center on Q4 where any stabilization (seeing some early signs in our (Las Vegas) Strip room survey) could help drive some recovery; as could more M&A/take-private discussions.”
