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Amidst a volatile sea of gaming stocks taking a plunge on Wednesday, Century Casinos (NASDAQ: CNTY) was swept along by the current, as the latest Consumer Price Index (CPI) report showed an unwelcome persistence in inflation rates. Set against this murky backdrop, there comes a sliver of light for Century, as noteworthy developments hint at a promising horizon.
The gambling industry found itself in a dicey confrontation with Wall Street, with Century Casinos at the crux. Following the March inflation index’s arrival, higher than forecasted, investors were quick to push the panic button. Yet, sometimes even the gloomiest economic clouds can’t fully overshadow a company’s intrinsic merit.
Chad Beynon, an analyst with Macquarie, evidently saw through the day’s economic haze and moved Century’s stock to a brighter outlook, upgrading it to “outperform” from its previous “neutral” stance. While maintaining a steady $5 price target, Beynon signals a robust potential ascendancy of nearly 53% from the day’s close at $3.27.
The recent descent of Century’s shares, with a 32% decline since the past year’s conclusion, was deemed exaggerated by Beynon. He contrasts Century’s performance with the slight gains of the Russell 2000 Index during the same temporal window and accentuates Century’s undervaluation within his coverage universe.
Perceived as an operating company due to its non-ownership of the foundations beneath its gaming havens, Century bets on an array of factors to boost its prospects as the narrative progresses toward 2025. Analyst optimism circles around the operator’s capacity to manifest earnings of significant calibre – an anticipated $168 million in EBITDA on a $700 million revenue stream next year, posits Beynon. A potential 85 cents per share in free cash flow juxtaposes appealingly with the company’s humble market cap and share price.
Missouri’s dynamic duo of casinos, alongside their Maryland and Reno siblings, stands as cornerstones, fueling the belief in Century’s rebound. The calendar marks several imminent events poised to galvanize the stock: fresh openings, re-licensing in Poland, and project completions, all of which weave into Century’s narrative tapestry.
Despite a wavering year-end leverage outlook, Century could witness the largest deleveraging within Beynon’s gaze by the year’s conclusion, potentially currying favor with investors. Solid performance from key properties is anticipated to stoke confidence, underpinning the company’s fusion of growth and value. Optimistically, two renovation endeavors promise lucrative returns on investment, further energizing Century’s trajectory into medium-term expansion.
These pages in Century’s story spell captivating chapters ahead, echoing Beynon’s final sentiment of a unique intertwining of growth and value – a testament to the unfolding journey of Century Casinos.
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