Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
GLPI’s results favorable
Jefferies’ David Katz on April 27 looked at GLPI’s status.
“The company continues to demonstrate earnings visibility, despite variability in funding schedules and overall macro uncertainty,” Katz wrote. “We continue to view the embedded growth in existing partnerships as supportive of our thesis with further opportunities forthcoming. We also note that the fixed nature of its revenues compares favorably with most others in our group. Reiterate Buy.”
A look at Double Down Interactive
B Riley Associates’ Josh Nichols on April 25 examined prospects for Double Down Interactive. Noting that the company will report first-quarter results in the coming weeks, Nichols wrote, “our revenue estimate of $81 million is below consensus of $85 million, and is -8.1% year-over-year, with social casino revenue that accounts for 88% of revenue -10.4% year-over-year, while icasino revenue (12% of sales) is +13.7% year-over-year. Our EBITDA projection of $33 million is on par with consensus, with EBITDA margin +400 basis points year-over-year from 36.8% in 1Q24 to 40.8%.”
Churchill Downs’ outlook
Truist Securities’ Barry Jonas on April 25 reported on Churchill Down’s first-quarter earnings call.
“Q1’s in line print was followed by a fairly transparent call and, in our view, unfairly negative market reaction,” Jonas wrote. “We think a ‘temporary pause’ in Derby projects makes sense and some investors will appreciate the flexibility. Commentary on wider uncertainty is likely not Churchill Downs specific and some lower tier Derby demand softness appears to be more than offset with Derby 151 on pace to be ‘comparable’ to 2024’s historic 150 race.
“Regardless, Churchill Downs should still grow this year and onward (including more Derby projects). We lower our 2025E estimates by -1% on more conservative assumptions, more in line with consensus. We remain Buy rated with next week’s Derby a potential catalyst.”
Macau faces trade tensions
In an April 24 release, Fitch Ratings commented on U.S. gaming companies in Macau (AA/Stable) facing increased “geopolitical challenges as the trade war continues. Trade tensions between the U.S. and China have raised concerns that U.S. gaming operators could be subject to retaliation, while the weaker economic outlook in China is likely to pressure gaming revenues and earnings in Macau. Healthy balance sheets and ratings headroom mitigate some of these risks for Fitch-rated issuers.”
Solid report from Boyd
“The solid, in-line results and commentary reflect well on Boyd shares, given the heightened economic concerns of the past several weeks,” Jefferies’ David Katz wrote on April 25. “The quarter supports our view that the modest capital investments in the portfolio coupled with the conservative balance sheet and ample capital returns should be met favorably on a relative and absolute basis going forward. Reiterate Buy.”
