Monarch Casino Shares Solid not Spectacular, Says Analyst
Shares of Monarch Casino & Resort (NASDAQ: MCRI) could follow becalm though important upside could follow severe to follow past o'er the near-term.
That’s the make of Stifel psychoanalyst Jeffrey Stantial following the regional casino operator’s first-quarter earnings report, which was delivered later(a) Wednesday. Overall, results were solid at Monarch’s 2 cassino hotels — Atlantis inwards Reno, Silver State and a namesake attribute in Black person Hawk, Colo. But Stantial said the buy in could hampered past broader regional gambling casino headwinds.
However, until broader regional gaming malaise and/or free-enterprise(a) headwinds inward Reno improve, we bump it hard to vindicate upside to estimates and/or multiple,” wrote the analyst.
He reiterated a “hold” rating on the carry with a $72 price target, implying upside of 8.2% from today’s snug at $66.54. Shares of Monarch are sour nearly 6% o'er the past tense month and 3.77% year-to-date. The companion told analysts and investors it repurchased $19.4 gazillion worth of its possess shares inwards the 1st triplet months of the year.
Monarch Casino Dealing with Headwinds
As metric past keep down of properties owned, Monarch Casino & Resort is the smallest U.S.-listed gambling casino stock. The manipulator runs Atlantis in Reno, Nev., and its eponymic venue inward the fast-growing Black Hawk, Colo. market.
In Reno, Monarch has been dealing with elevated promotional activity past rivals o'er the past tense several quarters as well as increased contention from Tribal operators inwards nearby markets inwards Northern California. Stantial notes it’s possible that the second half of this year will fetch easier comparables for Monarch as rivals’ promotional disbursal eases a bit.
“Coupled with paying back on hotel room remodels (~125 rooms will live finished by ending of Q2) & intact structural economic tailwinds, this suggests likely accelerating topline growth assuming stable consumer trends & competitor promotional behavior,” observed the analyst.
Stantial also pointed out that a 7% lower limit pay increase in Nevada, scheduled for July 1, and rivals’ promotional plans could make it hard for Monarch to leverage pricing force at its Reno property.
Somewhat Bullish on Shirley Temple Black Hawk
Monarch executives told analysts the accompany is adding marketplace divvy up in Colorado, peculiarly among mid- to high-tier bettors and there’s relieve plentiful elbow room left to earn more portion among VIPs. That could live a contract that the operator’s investments inwards Black Hawk are paying off.
Previous expenditures at its gambling casino hotel there could demonstrate good over the long-term because CO is rapidly adding universe and some competitors inwards Joseph Black Hawk are also enhancing their gaming properties.
“Our checks show continued healthy pricing force for MCRI’s market-leading non-gaming amenities, inwards special for the hotel stage business (consolidated hotel revenues were +8.4% Y/Y). Medium-term, we preserve to high spot forthcoming room renovations at nearby Ameristar as a possible positively charged catalyst for medium day-after-day rates,” concluded Stantial.