Century Inventory Has Signficant Upside Forward, Says Analyst
Posted on: Might 1, 2021, 12:54h.
Final up to date on: Might 1, 2021, 12:54h.
After hovering greater than 23 p.c this week, Century Casinos (NASDAQ:CNTY) is up 106 p.c year-to-date — simply making it one of many best-performing gaming equities.
These simply now discovering the regional on line casino operator can take coronary heart as a result of analysts see more upside coming for the shares. In reality, it was analyst commentary that sparked a number 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 worth goal. That suggests appreciation potential of about 38 p.c from the April 30 shut.
CNTY’s properties are locals-based, which we imagine are benefiting from a number of drivers within the present setting, together with the vaccine drive and financial stimulus,” stated Bain in a observe to shoppers.
These elements coupled with the inventory’s ascent verify analysts and buyers are prizing Century for its US publicity as a result of the shares are hovering even because the operator contends with short-term 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 Might 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 readily available and with Century inventory hovering, it has forex to buy groceries. Plus, there’s the broadly anticipated sale of its Poland assets, which ought to usher in further money for deal-making. B. Riley’s Bain says the gaming firm may imminently return to its acquisitive methods and that might probably set off a greater than doubling of the share worth.
“CNTY represents a scarce on line casino operator worth play that might 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 imagine CNTY’s subsequent U.S. on line casino acquisition will probably be introduced earlier than the tip of 3Q21, creating an estimated per-share worth of $4, not mirrored in our worth 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 imagine the removing of the $100 wager cap will assist casinos within the state seize an extended staying, larger finish clientele.
One other benefit for Century is that its home venues are closely frequented by locals — demographics which might be looking to spend stimulus cash and get out of the home after getting coronavirus vaccinations.
“We imagine locals casinos are at present 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.