On a mixed twenty-four hour period for gaming equities, Accel Entertainment (NYSE:ACEL) caudex is trading higher after a Wall Street analyst upgraded the shares and lifted his cost target.
In a line to clients today, Macquarie psychoanalyst Jordan River Bender upgrades the distributed gaming companion to “outperform” from “neutral.” That’s while moving his toll calculate on the buy in to $17 from $15, implying upside of 35 percent from the Dec. 2 close.
Of the pentad analysts natural covering Accel, foursome have got bullish or really bullish ratings on the stock. Bender’s $17 cost butt is somewhat in a higher place the consensus acoustic projection of $16.70.
It’s the video gaming terminals (VGT) resiliency, peculiarly during the COVID-19 confinement periods, that assist take form our more bullish thesis around ACEL,” said Bender.
The psychoanalyst points out that a variety of consumer industries, including gaming operators, were pinched past the wafture of delta variant cases of the coronavirus before this year. But Accel’s VGT inward its place country of Illinois showed little wallop on a day-by-day per-location throw basis.
Accel’s VGTs are found inwards businesses such as restaurants, bars, taverns, convenience stores, John Barleycorn stores, motortruck stops, and grocery stores. The society has to a greater extent than 2,300 of those machines crosswise the state.
Accel Stock Underappreciated Story
Quietly, Accel is upwardly 24.65 percent year-to-date, and yet with that impressive run, on that point are indications the buy in is inexpensive.
Bender highlights Accel’s strong equilibrise sheet, noting leveraging of just 1x and unexampled debt financing as positives for the company. The psychoanalyst also mentions Accel’s $200 trillion part buyback program, announced belatedly endure month, which could set aside management to repurchase up to 25 percent of the company’s shares outstanding.
Accel said it plans to repurchase upwardly to $200 jillion worth of its have shares. Companies are below no obligation to purchase the full amount proclaimed in a deal buyback plan. Regarding Accel’s repurchase scheme, the “timing and actual figure of shares repurchased will depend on a change of factors, including price, full general byplay and market place conditions, and alternative investiture opportunities,” according to the company.
Bender adds market place expansion could follow another catalyst for Accel stock, pointing to Georgia, Missouri, and Pennsylvania as states to watch.
Accel Terminal Income Still Steady
While more entertainment options are back up followers coronavirus shutdowns, distributed gaming was resilient during those periods. Bender expects that to bear true, potentially providing some light ballast for Accel’s terminal income.
“After almost all sectors reopened, we became farther constructive on the strength of this sector. For instance, Location have per solar day has been +40-50 percent higher up ’19 levels since Apr ‘21, and we have got seen little evidence trends are going plunk for to pre-COVID levels,” said the Macquarie analyst.
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