{"id":218305,"date":"2022-06-21T12:32:41","date_gmt":"2022-06-21T19:32:41","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=218305"},"modified":"2022-06-22T10:22:37","modified_gmt":"2022-06-22T17:22:37","slug":"roth-analyst-engel-sees-texas-upside-for-ags-shares","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/roth-analyst-engel-sees-texas-upside-for-ags-shares\/","title":{"rendered":"AGS Texas Opportunity not Reflected in Share Price, Says Analyst"},"content":{"rendered":"

AGS (NYSE:AGS) stock could offer Texas-sized opportunity that\u2019s not currently reflected in the share price. That’s following last week\u2019s Supreme Court ruling that paves the way for the Ysleta del Sur Pueblo tribe to offer bingo games near its El Paso reservation.<\/p>\n

\"AGS\"
AGS advertising a booth at a Native American gaming trade show. An analyst sees an opportunity in the stock following a Supreme Court Texas bingo ruling. (Image: Twitter)<\/figcaption><\/figure>\n

That\u2019s the sentiment of Roth Capital analyst Edward Engel, who rates AGS a \u201cbuy\u201d with a 12-month price target of $11, or more than double where the stock currently trades.<\/p>\n

After the Supreme Court recently ruled in favor of the Tigua Indians operating Class II gaming in Texas, we don’t believe this overhang removal or growth opportunity has been reflected in AGS shares,\u201d writes Engel in a note to clients. \u201cPrior to the ruling, investors were discounting ~$10-12M of high-margin revenues for AGS, where an unfavorable ruling would have wiped these out. Rather, the favorable ruling now presents a growth opportunity for AGS, as two tribal casinos in TX are more likely to expand casino floors.\u201d<\/p><\/blockquote>\n

Ysleta del Sur Pueblo, along with the Alabama-Coushatta<\/a> \u2014 another Texas tribe \u2014 could be beneficiaries of the Supreme Court ruling. So could AGS, because gaming expansion in Texas could increase demand among the company\u2019s tribal clients there.<\/p>\n

Texas Gaming Expansion Possible<\/h2>\n

As the second-largest US state, Texas is a coveted destination for commercial and tribal casino operators. But the state has long been reluctant<\/a> to embrace casino gaming.<\/p>\n

\n

Tribal gaming entities in Oklahoma and commercial operators in Louisiana have also opposed casinos in Texas, and are believed to lobby state politicians there to that effect. With that, it remains to be seen if the Supreme Court ruling will lead to tribal casinos in the state. But it\u2019s clear any additional gaming there could benefit AGS.<\/p>\n<\/div>\n

\u201cThe Tigua Indians operate a Class II casino in El Paso, with a local population of ~700k. The Alabama-Coushatta tribe operates a Class II casino ~90 miles from Houston, making it the closest casino to Houston, vs. the popular Lake Charles, LA casino ~140 miles away,\u201d adds Engel. \u201cPrior to the ruling, both tribes had been reluctant to pursue property expansions, despite evident capacity constraints in both markets. Following the ruling, we would expect both tribes to announce expansions in both gaming and non-gaming footprints.\u201d<\/p>\n

Most of AGS’s customers are in Florida, Oklahoma, and Texas, and the company applauded the Supreme Court decision.<\/p>\n

For AGS, Cheap Stock, Big Opportunity<\/h2>\n

AGS could be on the cusp of something meaningful in Texas, and a case can be made that opportunity isn\u2019t fully appreciated by the investment community.<\/p>\n

The Tigua and Alabama-Coushatta tribes operate just ~1,500 and ~800 Class II devices, respectively, where AGS supplies EGMs to both properties,\u201d notes Engel. \u201cAlongside any property expansions, we would expect AGS to get its fair share of both expanded gaming floors. This implies a meaningful turnaround vs bearish expectations that AGS would lose its footprint in the state.\u201d<\/p><\/blockquote>\n

AGS is discounted relative to peers, and with its stock slumping, it could deploy capital from an old buyback plan to repurchase some of its shares.<\/p>\n

\u201cPrior to the ruling, we believed AGS’s deep discount vs. peers was partially attributable to investors discounting Texas operations, which represented ~5% of revenues. Recent channel checks with gaming suppliers and operators indicate no softening in gaming consumption, despite investors pricing in recessionary outcomes,\u201d concludes Engel.<\/p>\n","protected":false},"excerpt":{"rendered":"

AGS (NYSE:AGS) stock could offer Texas-sized opportunity that\u2019s not currently reflected in the share price. That’s following last week\u2019s Supreme Court ruling that paves the way for the Ysleta del Sur Pueblo tribe to offer bingo games near its El Paso reservation. That\u2019s the sentiment of Roth Capital analyst Edward Engel, who rates AGS a […]<\/p>\n","protected":false},"author":46,"featured_media":218308,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,18456],"tags":[],"acf":[],"yoast_head":"\nRoth Analyst Engel Sees Texas Upside For AGS Shares<\/title>\n<meta name=\"description\" content=\"Texas could pay dividends for AGS, says Roth Capital analyst Engel.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/roth-analyst-engel-sees-texas-upside-for-ags-shares\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Roth Analyst Engel Sees Texas Upside For AGS Shares\" \/>\n<meta property=\"og:description\" content=\"Texas could pay dividends for AGS, says Roth Capital analyst Engel.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/roth-analyst-engel-sees-texas-upside-for-ags-shares\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-06-21T19:32:41+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-06-22T17:22:37+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/06\/AGS2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1080\" \/>\n\t<meta property=\"og:image:height\" content=\"1080\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/roth-analyst-engel-sees-texas-upside-for-ags-shares\/\",\"url\":\"https:\/\/www.casino.org\/news\/roth-analyst-engel-sees-texas-upside-for-ags-shares\/\",\"name\":\"Roth Analyst Engel Sees Texas Upside For AGS Shares\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/roth-analyst-engel-sees-texas-upside-for-ags-shares\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/roth-analyst-engel-sees-texas-upside-for-ags-shares\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/06\/AGS2.jpg\",\"datePublished\":\"2022-06-21T19:32:41+00:00\",\"dateModified\":\"2022-06-22T17:22:37+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Texas could pay dividends for AGS, says Roth Capital analyst Engel.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/roth-analyst-engel-sees-texas-upside-for-ags-shares\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/roth-analyst-engel-sees-texas-upside-for-ags-shares\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/roth-analyst-engel-sees-texas-upside-for-ags-shares\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/06\/AGS2.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/06\/AGS2.jpg\",\"width\":1080,\"height\":1080,\"caption\":\"AGS advertising a booth at a Native American gaming trade show. 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