Century Inventory Has Signficant Upside In advance, Suggests Analyst

Posted on: May well 1, 2021, 12:54h. 

Last up-to-date on: May 1, 2021, 12:54h.

Just after soaring far more than 23 p.c this week, Century Casinos (NASDAQ:CNTY) is up 106 per cent calendar year-to-day — conveniently creating it just one of the greatest-carrying out gaming equities.

Century stock
Cripple Creek, Colo., household to a Century Casinos venue. An analyst sees more upside ahead for the inventory. (Image: Pinterest)

These just now identifying the regional casino operator can get heart for the reason that analysts see far more upside coming for the shares. In actuality, it was analyst commentary that sparked some of the stock’s surge this week as B. Riley’s David Bain initiated protection of the gaming fairness with a “buy” rating and an $18 rate target. That indicates appreciation potential of about 38 percent from the April 30 close.

CNTY’s houses are locals-centered, which we believe are benefiting from many drivers in the existing environment, which include the vaccine travel and fiscal stimulus,” claimed Bain in a be aware to shoppers.

Individuals variables coupled with the stock’s ascent verify analysts and traders are prizing Century for its US exposure due to the fact the shares are soaring even as the operator contends with momentary closures of venues in Canada and Poland.

In the US, Century’s roster consists of a pair of casinos in its residence point out of Colorado, as perfectly as Missouri and West Virginia.

Century Inventory Could Be Moved by Acquisitions

Although Century’s portfolio of domestic properties is compact when compared to some rivals in the regional on line casino place, the operator is beloved by some analysts simply because management has a name for successfully integrating bolt-on acquisitions.

At the conclusion of final calendar year, the company had $63.4 million in cash on hand and with Century stock soaring, it has currency to go searching. As well as, there is the extensively envisioned sale of its Poland property, which ought to deliver in excess hard cash for deal-creating. B. Riley’s Bain claims the gaming business could imminently return to its acquisitive ways and that could most likely cause a a lot more than doubling of the share value.

“CNTY represents a scarce on line casino operator price participate in that could most likely double earnings just before desire, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) as a result of domestic acquisitions by CY23E, making for each-share price of more than $28, in our watch,” reported the analyst. “We believe CNTY’s upcoming U.S. casino acquisition will be announced just before the stop of 3Q21, making an approximated for every-share price of $4, not mirrored in our rate concentrate on.”

Bain says Century is possible examining “multiple US regional casino acquisition opportunities,” but he did not get into details.

More Catalysts for Century Inventory

One more imminent catalyst for Century is implementation of better betting restrictions and introduction of new desk games in Colorado. That came about through passage of Modification 77 past November and analysts and operators feel the removal of the $100 wager cap will aid casinos in the condition capture a lengthier staying, greater close clientele.

One more benefit for Century is that its domestic venues are heavily frequented by locals — demographics that are searching to spend stimulus income and get out of the home just after acquiring coronavirus vaccinations.

We consider locals casinos are presently benefiting from pent-up demand, increased capacity allowances, the COVID vaccine rollout (driving a important more mature demographic back again to the on line casino), near-to-home leisure, fiscal stimulus, and structural margin augmentation,” claimed Bain.