Monarch Casino Shares Solid not Spectacular, Says Analyst
Shares of Monarch Casino & Resort (NASDAQ: MCRI) could follow calm though substantial upside could follow tough to come in by o'er the near-term.
That’s the read of Stifel psychoanalyst Jeffrey Stantial next the regional casino operator’s first-quarter earnings report, which was delivered belatedly Wednesday. Overall, results were solidness at Monarch’s two casino hotels — Atlantis in Reno, Nevada and a namesake holding in Shirley Temple Hawk, Colo. But Stantial said the buy in could hampered by broader regional casino headwinds.
However, until broader regional gaming unease and/or militant headwinds inwards Reno improve, we bump it difficult to warrant upside to estimates and/or multiple,” wrote the analyst.
He reiterated a “hold” rating on the gunstock with a $72 damage target, implying upside of 8.2% from today’s secretive at $66.54. Shares of Monarch are turned nearly 6% over the past month and 3.77% year-to-date. The company told analysts and investors it repurchased $19.4 jillion worth of its own shares inwards the for the first time ternion months of the year.
Monarch Casino Dealing with Headwinds
As metric by list of properties owned, Monarch Casino & Resort is the smallest U.S.-listed cassino stock. The manipulator runs Atlantis inward Reno, Nev., and its eponymous locus in the fast-growing blackamoor Hawk, Colo. market.
In Reno, Monarch has been dealing with elevated promotional activity by rivals o'er the yesteryear several quarters as comfortably as increased contention from Tribal operators inwards nearby markets inwards Northern California. Stantial notes it’s possible that the endorsement half of this twelvemonth will get easier comparables for Monarch as rivals’ promotional spending eases a bit.
“Coupled with paying back on hotel elbow room remodels (~125 rooms will be ruined past ending of Q2) & inviolate structural economic tailwinds, this suggests likely accelerating topline growing assuming horse barn consumer trends & competitor promotional behavior,” observed the analyst.
Stantial also pointed come out that a 7% minimum remuneration growth inward Nevada, scheduled for July 1, and rivals’ promotional plans could pee it hard for Monarch to purchase pricing powerfulness at its Reno property.
Somewhat Bullish on blackamoor Hawk
Monarch executives told analysts the companionship is adding market place percentage inward Colorado, in particular among mid- to high-tier bettors and there’s allay plenteous way left hand to make more divvy up among VIPs. That could live a mark that the operator’s investments inward blackamoor Hawk are paying off.
Previous expenditures at its gambling casino hotel on that point could shew good over the long-term because Colorado is rapidly adding universe and some competitors inward blackamoor Hawk are also enhancing their gaming properties.
“Our checks indicate continued level-headed pricing force for MCRI’s market-leading non-gaming amenities, in special for the hotel business concern (consolidated hotel revenues were +8.4% Y/Y). Medium-term, we preserve to high spot forthcoming way renovations at nearby Ameristar as a potency positively charged accelerator for intermediate day-to-day rates,” concluded Stantial.
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