Century Casinos (NASDAQ:CNTY) stock surged 9.43 percent on Friday, racing to a new 52-week high…
Posted on: Might 1, 2021, 12:54h.
Final up to date on: Might 1, 2021, 04:37h.
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After hovering greater than 23 p.c this week, Century Casinos (NASDAQ:CNTY) is up 106 p.c year-to-date. That simply makes it one of many best-performing gaming equities.
Cripple Creek, Colo., residence to a Century Casinos venue. An analyst sees extra upside forward for the inventory. (Picture: Pinterest)
These simply now discovering the regional on line casino operator can take coronary heart, as a result of analysts see extra upside coming for the shares. Actually, it was analyst commentary that sparked a few of the inventory’s surge this week, as B. Riley’s David Bain initiated protection of the gaming fairness with a “purchase” ranking and an $18 value goal. That means appreciation potential of about 38 p.c from the April 30 shut.
CNTY’s properties are locals-based, which we consider are benefiting from a number of drivers within the present surroundings, together with the vaccine drive and monetary stimulus,” stated Bain in a be aware to shoppers.
These components, coupled with the inventory’s ascent, verify analysts and traders are prizing Century for its US publicity, as a result of the shares are hovering even because the operator contends with momentary closures of venues in Canada and Poland.
Within the US, Century’s roster consists of a pair of casinos in its residence state of Colorado, in addition to Missouri and West Virginia.
Century Inventory May Be Moved by Acquisitions
Whereas Century’s portfolio of home properties is small in comparison with some rivals within the regional on line casino area, the operator is beloved by some analysts as a result of administration has a status for successfully integrating bolt-on acquisitions.
On the finish of final yr, the corporate had $63.4 million in money available, and with Century inventory hovering, it has foreign money to buy groceries. Plus, there’s the extensively anticipated sale of its Poland property, which ought to herald further money for deal-making. B. Riley’s Bain says the gaming firm might imminently return to its acquisitive methods, and that would probably set off greater than doubling of the share value.
“CNTY represents a scarce on line casino operator worth play that would probably double earnings earlier than curiosity, taxes, depreciation, amortization, and restructuring or lease prices (EBITDAR) by home acquisitions by CY23E, creating per-share worth of over $28, in our view,” stated the analyst. “We consider CNTY’s subsequent US on line casino acquisition can be introduced earlier than the tip of 3Q21, creating an estimated per-share worth of $4, not mirrored in our value goal.”
Bain says Century is probably going reviewing “a number of US regional on line casino acquisition alternatives,” however he didn’t get into specifics.
Extra Catalysts for Century Inventory
One other imminent catalyst for Century is implementation of upper betting limits and introduction of recent desk video games in Colorado. That happened by way of passage of Modification 77 final November, and analysts and operators consider the elimination of the $100 wager cap will assist casinos within the state seize a longer-staying, higher-end clientele.
One other benefit for Century is that its home venues are closely frequented by locals — demographics that want to spend stimulus money and get out of the home after getting coronavirus vaccinations.
“We consider locals casinos are presently benefiting from pent-up demand, elevated capability allowances, the COVID vaccine rollout (driving a key older demographic again to the on line casino), close-to-home leisure, fiscal stimulus, and structural margin augmentation,” stated Bain.
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