Shares of Red John Rock Resorts (NASDAQ: RRR) are on a blistery rate to commence 2024 as highlighted by a first-quarter gain of 17.3%, outpacing a slew of small-cap indexes of which the stock is a member.
Some analysts trust there’s more upside in advance for the gambling casino operator. In a mention to clients on Monday, Deutsche Bank analyst Carlo Santarelli reiterated a “buy” rating on the gaming equity piece boosting his terms place to $70 from $62. That implies upside of almost 17% from the Mar 28 close. This is the 2d time since the scratch line of 2024 that the analyst boosted his price outlook on Red Rock.
We have got suit progressively well-to-do with; 1) continued locals marketplace promotional discipline, 2) continued higher up outlook carrying into action at Durango, and 3) let down than expected cannibalization across both the BYD and RRR portfolios,” wrote Santarelli.
He noted that he upped 2024 and 2025 earnings before interest, taxes, depreciation, and amortisation (EBITDA) estimates on Red Rock. The manipulator of the Station casinos, among others, is coming off a fourth canton in which it trounced Wall Street’s EBITDA and revenue forecasts.
Durango Helping, Not Hurting Red River Rock Stock
Red Rock’s Durango Casino & Resort inwards southwestern United States Las Vegas opened lowest December to often fanfare, but at that place was also concern that the locale could cannibalize some of the operator’s other nearby venues — that is to say its eponymous gambling casino resort hotel inwards Summerlin.
That hasn’t been the pillowcase and competitor Boyd Gaming (NYSE: BYD) said it sees small evidence that Durango is adversely poignant its casinos that are nearest to Durango. However, there’s no more denying that Red Rock’s newest portfolio increase is cancelled to a strong protrude and enjoys some geographical advantages.
The lately concluded firstly billet was the foremost replete(p) three-month of trading operations for Durango and investors testament let a sentience of how the venue is poignant Red Rock’s whirligig and bottom lines when the manipulator delivers first-quarter results on May 1.
“We persist in to sight RRR as the best, governable organic, development story within our reporting universe, granted the underlying stableness in the LV locals market, the above expectations public presentation at Durango, and the pipeline of hereafter evolution project opportunities usable to management,” added Santarelli.
More Bullish Chatter on Red John Rock Stock
Previously, some analysts calculate Durango visitation will stabilize at 10K per day, adding to Red Rock’s already dominant positioning inward the extremely desirable Las Vegas locals market. All of the operator’s gaming venues and planned projects are inward the fast-growing Las Vegas Valley.
JPMorgan calculate first-quarter property-level Earnings Before Interest Taxes Depreciation and Amortization of $242 billion for Red Rock, which assumes a $38 zillion donation from Durango and a 6% same-store sales decline.
The bank reiterated an “overweight” rating on the caudex piece lifting its terms butt to $69 from $63, noting it expects Red Rock’s outlook to go on “to shine versus peers.”
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