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GLPI Inventory Seen as Gaming REIT Winners, Earns Analyst Reward

Posted on: April 1, 2021, 09:31h. 

Final up to date on: April 1, 2021, 09:31h.

Gaming and Leisure Properties (NASDAQ:GLPI) inventory is increased by greater than two % Thursday following an endorsement from a sell-side analyst.

GLPI stock
GLPI’s Ameristar in Black Hawk, Colo. An analyst is constructive on the gaming REIT. (Picture: Go to Denver)

Initiating protection of the gaming actual property funding belief (REIT), Mizuho Securities USA analyst Haendel St. Juste charges GLPI inventory a “purchase” with a $47 value goal. That’s barely beneath the Wall Avenue consensus of $48 and implies upside of greater than 11 % from the March 31 shut. He’s the fifteenth analyst masking the inventory and the eleventh with a really bullish score on the identify.

GLPI (provides) sturdy underlying tenant credit score and structural lease enhancements (i.e., grasp leases), leading to a lower-risk platform that we consider is under-appreciated by the market and has been key to GLPI’s (and friends’) streak of one hundred pc hire collections since GLPI’s inception,” stated the analyst in a notice to shoppers.

The corporate’s most direct opponents are MGM Development Properties (NYSE:MGP) and VICI Properties (NYSE:VICI).

GLPI Inventory Regular Concept in Regular Group

Following the preliminary wave of coronavirus instances within the US, the gaming REITs have been punished alongside their operator tenants as traders fretted about hire assortment and the specter of doable foreclosures.

Finally, names such as GLPI proved resilient not solely amongst gaming equities, however relative to the broader universe of actual property shares. Whereas lodge, mall and workplace REITs have been repudiated by the hands of the pandemic, GLPI and rivals delivered stellar hire assortment whilst tenants handled multi-month shutdowns throughout the nation. Finally, foreclosures fears proved unfounded, serving to GLPI inventory to a achieve of 55 % over the previous 12 months — far forward of the 31.51 % returned by the MSCI US Investable Market Actual Property 25/50 Index.

St. Juste, the Mizuho analyst, says GLPI and its friends are “winners within the restoration of the U.S. financial system as shopper spending and gaming revenues recuperate/develop.”

GLPI owns the property property of 48 gaming venues throughout 16 states. Its largest tenant is Penn Nationwide Gaming (NASDAQ:PENN) although it leases properties to some smaller operators as effectively.

Conservative Concept

As St. Juste notes, GLPI has a decrease threat portfolio of property. That’s by design as executives beforehand voiced preferences for regional gaming actual property, opting to eschewing the volatility related to Las Vegas and different vacation spot markets.

At present, the REIT owns simply three venues in Southern Nevada and it’s shopping Tropicana Las Vegas. Earlier this 12 months, GLPI administration stated there’s loads of curiosity in that built-in resort, however many potential patrons lack the monetary assets to make sufficient provides.

That state of affairs may change because the financial system improves and because the Strip shakes off the results of COVID-19. Within the meantime, GLPI isn’t in a rush to promote the Tropicana, indicating it might watch for extra compelling provides.

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