In the shifting tides of the gaming industry, Churchill Downs (NASDAQ: CHDN) emerged from the trading day with a whisper of triumph, its shares nudging a notch higher. This came on the heels of the company’s latest financial revelation, a robust fourth-quarter report that spoke of promising ventures reaching beyond the ledger’s ink.
As the echoes of gratifying earnings faded, analysts cast their gaze ahead, eager to divine the fortunes interwoven with Churchill Downs’ upcoming ventures. Among these is The Rose Gaming Resort in Dumfries, Virginia, a project that freshly garnered the green light to unfurl its initial phase. Additionally, the ambitious tapestry of Churchill Downs’ future includes Owensboro Racing & Gaming in Owensboro, Kentucky, set to birth its enterprise in early 2025, propelling an Ellis Park Racing and Gaming annex to new heights while bolstering horse race purses with its vibrant pulse.
In a realm where the domestic horseracing industry’s pulse is an erratic listen, Churchill Downs finds vitality in the veins of live and historical racing (L&H). L&H unfurls as a sinew of strength, an undeniable asset in the company’s portfolio.
“Management heralds strength across the L&H expanse, triumphing in earnings across nearly all domains,” noted Stifel analyst Jeffrey Stantial. “There’s a sense, from the murmured conversations to the figures on the wind, that this stems from a confluence of mild December weather and the shuttering of skill-based games, coupled with a profound vigor from Kentucky’s key locations.”
Stantial’s conviction resonates through his “buy” clarion, echoed in a $150 price target that cuts through the market’s white noise.
Churchill Downs stands as a bastion of bullish sentiment, an optimism that burgeons despite its absence from the glittering deserts of Las Vegas and the online sports betting bonanza. The company’s verve springs from a font of commendable investment return projects, along with the fruits harvested from Exacta and P2E acquisitions. The tapestry is enriched by the embroidered narrative of historical horse racing (HHR) machines, a narrative that finds chorus in eight out of 10 stock analysts singing the hymn of “strong buy” or “buy.”
Wall Street’s gaming aficionados find their darling in Churchill Downs, attributing affection to the growth of its TwinSpires unit and perspicacious acquisitions.
“The TwinSpires segment, too, dances beyond expectations,” Stantial elaborates, “boasting an adjusted EBITDA that waltzes ahead of our forecasts. Revenue stands firm, margins swell stoutly—testimony to a miscast mix impact from Exacta.”
While the pages of the first quarter are still being written, anticipation curls when considering Churchill Downs’ next act. The second quarter glimmers with potential kindling for the stock; the Kentucky Derby is poised to spring forth in May, and a hotel at the Terre Haute Casino Resort beckons with its opening.
A constellation of new amenities awaits at Churchill Downs’ legendary track, ushering in additional seating, a rejuvenated paddock, and exclusive pleasures for the glitterati.
“For Churchill Downs’ Kentucky locales, the fourth-quarter performance pirouettes near our projections,” Stantial concludes, with prospects of ascendant growth in the coming quarter. The newly launched Derby City Downtown anticipates a surge as Louisville basks in summertime tourists, while the flocking Derby enthusiasts infuse vibrancy and verve.
