Golden Entertainment's shares shine, offer big benefits, says an analyst
Posted on April 28, 2021, 8:21 am
Last Updated: April 28, 2021, 11:21 AM.
Golden Entertainment (NASDAQ: GDEN) shares, already at a hot pace, offer significant appreciation potential. This is happening as the Las Vegas Resident (LVL) segment comes to life and more Californians are coming to Nevada, notes a sales analyst.
B. Riley analyst David Bain starts today a coverage of the Strat operator with a buy rating and a 12 - monthly target price of the $ 48. That's a 60 percent increase from April 27 close. The Bain report is having a positive impact on Golden stocks as the stock rose six percent in early trading against a volume that appears to overshadow the daily average. Inventories are 58 percent higher from the start of the year.
We believe that GDEN's local gaming and entertainment portfolio is unique and strongly correlates with both short-term and long-term growth factors, although its share is valued more than 3 turnover lower than comparable "said analyst B. Riley.
His earnings before interest, taxes, depreciation (EBITDA) for the gaming operator for the first three quarters of this year are five, seven and nine percent above consensus forecasts, respectively.
The Golden company is based in 10 Las Vegas, nine of which are located in southern Nevada and the other is Rocky Gap, Maryland.
Golden Stock Loving people of Las Vegas
As with many smaller gambling operators, Golden Entertainment relies heavily on local traffic. This makes action a game driven by government incentives and rising levels of coronavirus vaccination.
Bain notes that the company generates 85 percent of its LVL revenue and is the dominant force in Las Vegas hyperlocal game offerings. PT's entertainment division operates more than 60 bars, pubs and casual dining restaurants in Nevada - a plus at a time when analyst B. Riley sees "dynamic growth in the Las Vegas bar / tavern / tour market."
" The GDEN Wallet now benefits from a number of post-COVID factors, including the return of the primary, older demographic to local casinos. ~ 80 percent plus GDEN EBITDA is generated in NV (mostly local play), one of the fastest growing populations supported by the California migration, Bain said.
More benefits for gold investors
Golden's route runs in Montana and Nevada, with Illinois and Pennsylvania possible shortly. Should Pennsylvania join this circle, it could be a major catalyst for golden stocks.
“GDEN has already established partnerships with multiple locations should Pennsylvania routes be approved. We calculate every 1.06 locations served by GDEN is $ 7. 35 per share, said Bain. “Pennsylvania's long-term market could host ~ 30,000 locations and GDEN could serve ~ 25% of the market, we believe. "
The gaming company also owns 17 acres of unused land on the Strip, which Bain says is worth $ 4. 60 share. Golden also owns all the land on which his casinos operate - real estate valued at $ 1.2 billion. No factor is included in the share price, the analyst says.
Another advantage for Golden is that: under the previous deal, it is expected to receive $ 75 million from William Hill should take over the British betting operator. Caesars Entertainment (NASDAQ: CZR) closed its William Hill acquisition last week. Bain says the cash inflow could be used to finance the return of capital to gold investors in the fourth quarter of this year, although he has not specified whether this would be in the form of a repurchase or dividend.