Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Las Vegas Strip room rates slightly increase
J.P. Morgan analyst Joseph Greff focused on the Las Vegas Strip in a February 28 note.
“Las Vegas revenue per available room for the month was $177, up 6.1% year-over-year,” Greff wrote. “Las Vegas Strip average daily rate for the month was up 2% year-over year while occupancy was up 330 basis points year-over-year.
“Room inventory for the month was 150,325, down 3.7% year over year and down 0.2% sequentially. Occupied room nights were flat year over year.
“For the month, citywide occupancy was 81.9%, up 300 basis points year-over-year. Weekend occupancy was 83.6%, compared with 77% for midweek. On a year-over-year basis, weekend occupancy increased 200 basis points while midweek was up 320 basis points.
“January average daily auto traffic was up 2.7% year over year on all major highways and up 3.1% on I-15 at the Nevada/California border. Total air passengers were up 0.3% year-over-year.”
Golden Entertainment results mixed
Analyst David Katz of Jefferies focused on Golden Entertainment in a February 27 statement.
“The mixed report, lighter on the top line and in-line on the bottom line, is generally neutral for the shares,” Katz wrote. “The commentary from management indicating an earnings stability in 2025 is incrementally positive, offset by the ongoing quest for capital growth which, we believe, tempers upside potential in the shares. We consider the possibility for positive catalysts within 2025, which are to be determined. Reiterate Hold.
Barry Jonas of Truist Securities also looked at Golden Entertainment in a February 27 statement.
“Golden Entertainment Q4 EBITDA was in-line with our estimate, and +1% to the Street,” Jonas wrote. “The election and a softer F1 weighed down occupancy and average daily room rate throughout Vegas, though December/January were much better. Management expects a return to growth for the Strat in 2025. Taverns and Nevada locals both seem to be turning the corner as well. We lower our 2025 EBITDA by -2% largely on the Q1 Super Bowl comp and keep our price target at $36. We remain Buy rated on attractive valuation.”
Penn Entertainment shows incremental value
Jeffries’ Katz also commented on Penn Entertainment’s quarterly results in a February 27 note.
“The quarterly results demonstrated resiliency across the core retail business despite competitive pressures, which we anticipate will continue into 2025,” Katz wrote. “Furthermore, the growth capital projects should provide incremental value in the longer-term. However, in our view, the uncertainty surrounding the digital segment’s market share and operating performance remains a key area of debate, which is a key driver of our tempered view. Reiterate Hold.”
Nevada/Las Vegas 1st quarter
J.P Morgan’s Greff looked at Nevada’s fourth-quarter results on February 27.
“January Las Vegas Strip gross gaming revenue of $840 million increased 22.4% year-over-year, Las Vegas locals revenue of $281.9 million was down 1.2% year-over-year, and statewide (Las Vegas Strip, Las Vegas locals, Reno, Tahoe, and other) gaming revenues of $1.44 billion were up 12.5% year-over-year,” Greff wrote. “… For the Las Vegas Strip, table game hold was 18.9% versus 14.8% the prior year. Baccarat hold was 26.7% versus 16.4% in the prior year. Table games drop was up 15% year-over-year (up 28% versus 2019), table games drop ex-baccarat was up 6% year-over-year, slot drop was up 11% year-over-year and locals slot drop was up 2% year-over-year.”
Truist Securities analyst Jonas also looked at Las Vegas in a February 27 note.
January Strip gaming win rose +22% year-over-year, driven by very strong baccarat (up +121% year-over-year) and Table win (+46%). Following their earnings calls, Strip operators sounded overall positive on January/Q1 performance thus far, despite the tough Super Bowl comp. January visitation was slightly down -1% year-over-year, though Strip was up +6%. Locals performance was softer, down -1% year-over-year, likely impacted by unfavorable slot accounting. Net, net 2025 is off to a “super” start with the Strip seeing its best growth rate in 13 months, though we anticipate a softer February.”
