Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Truist Securities’ Barry Jonas examined the Las Vegas Strip on June 15:
“Last week, we met with Las Vegas Strip and Locals operators along with various industry contacts. Following our recent MGM upgrade and recent M&A, Strip commentary feels more positive, with growth potential of easier comps and all-inclusive pricing improving the ‘value narrative.’ Locals sound generally positive as well, with strong core/regional play while destination play not any worse. We continue to watch for any impact if gas prices remain higher for longer, but most companies aren’t seeing it just yet. Reiterate Buy on Red Rock Resorts, Boyd and MGM.
Jeffries’ David Katz looked at two key stocks to be discussed at a conference at Nantucket, Rhode Island, on June 12:
“We expect Churchill Downs to provide incremental color on the positive revenue trends reported to date in the quarter, notably in Virginia/Kentucky. In addition, we believe management may provide a recap of (Kentucky) Derby performance and a review of the go-forward capital allocation strategy. Meanwhile, DraftKings commentary is likely to center on prediction markets following the better-than-expected May update last week. We also expect investor focus to include positioning into the World Cup, with incremental color on group play trends to date.”
J. P. Morgan’s Dan Politzer wrote about the possible acquisition of MGM Resorts on June 12:
“Despite MGM’s pullback to $47/share from its post-offer high of $51/share, we still see potential for People’s Incorporated ~$48.30/share acquisition offer to increase — especially if MGM Osaka is ultimately ascribed meaningful value. Accordingly, we raise our year-end 2026 price target to $53 (from $46) to incorporate an acquisition premium that we believe is supported by MGM’s longer-term growth optionality in Japan. We note our underlying math suggests MGM Osaka could be worth $19/share today on a discounted basis. We acknowledge the property isn’t expected to open until 2030 — beyond many investors’ time horizons — so we don’t expect the stock to fully reflect even this discounted value today; however, we believe it should be considered in an acquisition scenario.”
