Churchill, Penn Leisure Earn Purchase Rankings From Mizuho


Posted on: March 26, 2024, 11:21h. 

Final up to date on: March 27, 2024, 12:29h.

Churchill Downs (NASDAQ: CHDN) and Penn Leisure are among the many batch of gaming shares considered favorably in new protection by Mizuho.

ESPN Bet Penn Entertainment sports betting
The ESPN Guess brand. Operator Penn Leisure earned a “purchase” score in new protection by Mizuho. (Picture: ESPN Guess)

Analyst Ben Chaiken initiated protection of greater than a half dozen gaming names, together with Churchill and Penn, citing the growth of the U.S. sports activities wagering area as a catalyst for the latter. In a report back to shoppers, the Mizuho analyst rated Penn a “purchase” with a $29 value goal, implying upside of 70% from the March 25 shut.

We count on the depth and breadth of the ESPN buyer base, and integration with ESPN Guess, ought to drive environment friendly buyer acquisition offering an edge to PENN relative to different operators,” Chaiken famous.

Chaiken added that Penn’s land-based regional on line casino operations are undervalued, whereas calling ESPN Guess a “name possibility” on the operator’s shares as a result of, for the time being, little or no worth is assigned to Penn’s on-line sports activities betting enterprise by the funding neighborhood. Chaiken additionally identified that the going might be powerful when ESPN Guess enters states with established rivals, indicating that the operator’s success in new sports activities betting states is pivotal when it comes to bolstering market share.

Churchill Downs Praised by Chaiken, Too

Churchill Downs additionally drew reward from Chaiken, who charges the inventory a “purchase” with a $142 value goal. That suggests upside of 20.6% from the March 25 shut.

In noting that the regional gaming firm’s already sturdy free money flow-generating capabilities ought to pattern greater — as earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) does the identical — Chaiken added the Churchill Downs’ venture pipeline, together with casinos in Indiana and Virginia and enhancements at its namesake racetrack in Kentucky, aren’t totally mirrored within the share value.

Chaiken additionally stated that regulatory efforts to doubtlessly criminalize some types of grey market wagering in Kentucky and Virginia might be a boon for Churchill Downs. That’s as a result of the operator is regulated and one of many largest in these jurisdictions.

The analyst can also be bullish on different regional on line casino operators, together with Boyd Gaming (NYSE: BYD) and Crimson Rock Resorts (NASDAQ: RRR), assigning “purchase” scores to each names.

Constructive on DraftKings, Too

Excessive-flying DraftKings (NASDAQ: DKNG), shares of that are up 38% 12 months up to now, additionally drew reward from Chaiken. He began protection of the net sportsbook big with a “purchase” score and a $50 value forecast. That suggests upside of 24.7% from Monday’s shut.

Noting that the operator has 30%-plus market share in North America, Chaiken stated DraftKings is the “main on-line sports activities betting and iGaming firm in North America,” and that Wall Road “underestimates the magnitude of the working leverage within the enterprise.”

Chaiken added that DraftKings ought to proceed posting sturdy gross sales development. That’s as extra states allow sports activities wagering, and he believes the operator will likely be profitable in driving advertising and marketing bills decrease.

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