Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry
Flutter NYSE listing
David Katz of Jefferies Jan. 26 called the move by FanDuel parent company Flutter to a U.S. primary listing on the NYSE a “touchdown,” writing that it “creates a positive short-term catalyst path. New Jefferies analysis of the US market backdrop increases our confidence in Flutter’s prospects, both in the scale of the US market and the outsized benefits of being the #1 operator. A headline 16x EV/EBITDA for FY24E versus 18% compound growth compares to US-listed, high growth, digital peers that enjoy twice the multiple.
Las Vegas room rates
In a January 26 note. J.P. Morgan analyst Joseph Greff examined visitor and hotel volumes and statistics provided the Las Vegas Convention and Visitor’s Authority.
“Visitation for the month was 3.398 million, up 2.7% year over year and coming in 2% below December 2019 levels (up 4 points sequentially relative to 2019),” Greff wrote. “Citywide occupancy was 79.9%, down 520 basis points versus December 2019, on a room inventory base that was 3.5% higher than in 2019, reflecting 154,662 open rooms. Convention attendance was 195,700 attendees in December, down 11% year over year (down 45% versus 2019).
Truist Securities analyst Barry Jonas Jan. 26 also weighed in on Las Vegas Strip room rates, writing “Our data shows January rates are trending down year-over-year for both MGM/Caesars (-17%/-6%), though Caesars has shown significant acceleration from the first survey period (+39%). March data is also trending down significantly (-28%/-34%) as the comp is particularly difficult from the absence of Con/Agg (the construction convention) this year. February rates are showing significant strength (primarily driven by Super Bowl weekend), with Las Vegas Strip Proxy/MGM/Caesars up +43%/+24%/+28% year-over-year respectively. February will also benefit from a leap year schedule, with the 29th landing on a Thursday.
Churchill Downs
Jefferies’ Katz Jan. 25 also wrote that a recent investors’ bus tour in Virginia with Churchill Downs management “reinforces our bullish view on the ample growth opportunities vs. peers. Virginia, in particular, presents considerable further organic and capital growth which should continue pushing results higher through and beyond our forecast horizon. We disagree with the key push-back on valuation, 11.3X 2025 EBITDA, as the inherent value and growth profile support higher levels for growth over time.”
