On a mixed twenty-four hour period for gaming equities, Accel Entertainment (NYSE:ACEL) gunstock is trading higher after a Wall Street analyst upgraded the shares and lifted his cost target.
In a line to clients today, Macquarie analyst Jordan Bender upgrades the distributed gaming companion to “outperform” from “neutral.” That’s patch moving his terms calculate on the stock to $17 from $15, implying upside of 35 percent from the Dec. 2 close.
Of the five analysts natural covering Accel, quatern experience bullish or really bullish ratings on the stock. Bender’s $17 cost target is more or less to a higher place the consensus acoustic projection of $16.70.
It’s the video gaming terminals (VGT) resiliency, specially during the COVID-19 confinement periods, that aid constitute our to a greater extent bullish thesis around ACEL,” said Bender.
The psychoanalyst points come out that a variety of consumer industries, including gaming operators, were pinched past the undulation of delta variant cases of the coronavirus before this year. But Accel’s VGT inwards its nursing home province of IL showed little impact on a day-by-day per-location take hold basis.
Accel’s VGTs are found inward businesses such as restaurants, bars, taverns, convenience stores, hard liquor stores, motortruck stops, and grocery stores. The troupe has more than 2,300 of those machines crosswise the state.
Accel Stock Underappreciated Story
Quietly, Accel is up 24.65 percent year-to-date, and fifty-fifty with that impressive run, in that respect are indications the carry is inexpensive.
Bender highlights Accel’s warm equipoise sheet, noting leveraging of just now 1x and young debt funding as positives for the company. The analyst also mentions Accel’s $200 trillion divvy up buyback program, proclaimed tardily in conclusion month, which could reserve direction to repurchase upwardly to 25 percent of the company’s shares outstanding.
Accel said it plans to repurchase upwards to $200 trillion worth of its own shares. Companies are under no more indebtedness to purchase the intact amount announced in a deal buyback plan. Regarding Accel’s repurchase scheme, the “timing and actual keep down of shares repurchased will depend on a change of factors, including price, full general concern and marketplace conditions, and alternative investiture opportunities,” according to the company.
Bender adds market place elaboration could live another accelerator for Accel stock, pointing to Georgia, Missouri, and PA as states to watch.
Accel Terminal Income Still Steady
While more entertainment options are plump for following coronavirus shutdowns, distributed gaming was resilient during those periods. Bender expects that to make true, potentially providing some ballast for Accel’s terminus income.
“After almost all sectors reopened, we became farther constructive on the strength of this sector. For instance, Location contain per day has been +40-50 percent above ’19 levels since April ‘21, and we experience seen minuscule evidence trends are going backrest to pre-COVID levels,” said the Macquarie analyst.