{"id":292279,"date":"2023-10-02T16:03:52","date_gmt":"2023-10-02T21:03:52","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=292279"},"modified":"2023-10-02T21:10:55","modified_gmt":"2023-10-03T02:10:55","slug":"churchill-downs-top-gaming-growth-story-says-stifel","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/churchill-downs-top-gaming-growth-story-says-stifel\/","title":{"rendered":"Churchill Downs Top Gaming Growth Story, Says Analyst"},"content":{"rendered":"

Churchill Downs (NASDAQ: CHDN) is mired in a slump that\u2019s seen the shares drop 16.08% over the past 90 days. But that tumble belies the company\u2019s compelling growth prospects.<\/p>\n

\"Churchill
Horses break from the outside during the 148th Kentucky Derby on May 7, 2022. Stifel favors Churchill Downs stock as a top gaming growth story. (Image: Eclipse Sportswire<\/em>)<\/figcaption><\/figure>\n

That\u2019s the take of Stifel analyst Jeffrey Stantial, who initiated coverage of the stock with a \u201cbuy\u201d rating and a $148 price target in a new report to clients today. That implies upside of about 29% from today\u2019s close. He noted Churchill Downs is one of the best growth stories in the gaming universe.<\/p>\n

We see growing investor appreciation for CHDN’s high-quality Kentucky Derby asset (pricing power; high-margins; proven durability), with potential flight-to-quality tailwinds amidst an uncertain outlook for the consumer,\u201d<\/strong> Stantial wrote.<\/p><\/blockquote>\n

While Churchill Downs has no Las Vegas Strip exposure, and there are lingering concerns<\/a> about the state of the U.S. horse racing industry, the stock is a gaming favorite on Wall Street. Catalysts include an extensive pipeline of high return on investment projects, benefits from the Exacta and P2E acquisitions, and the emerging growth story tied to historical horse racing<\/a> (HHR) machines.<\/p>\n

Churchill Downs More than Horse Racing<\/h2>\n

Because of its ownership of the Kentucky Derby, which takes place at the company\u2019s namesake track, and its other horse racing assets — to unknowing investors, Churchill Downs is viewed through the lens of horse racing.<\/p>\n

\n

The company could generate approximately 44% of its 2023 earnings before interest, taxes, depreciation and amortization (EBITDA) from racing, which may appear to be a drag during mounting headwinds<\/a> for the domestic horse racing industry. As Stantial notes, there\u2019s much more to the Churchill Downs investment thesis.<\/p>\n<\/div>\n

\u201cCHDN operates 11 regional casinos across 10 states, as well as racetracks and historical horse racing (HHR) facilities in Kentucky, Virginia, and soon-to-be New\u00a0 Hampshire,\u201d added the analyst. \u201cCHDN\u2019s TwinSpires business is the leading online horse wagering platform, with content & technology also monetized via B2B partnerships.\u201d<\/p>\n

Regional casinos and TwinSpires are expected to contribute 45% and 11% of the operator\u2019s 2023 EBITDA, respectively.<\/p>\n

Other Catalysts for Churchill Downs<\/h2>\n

At the state level, Virginia could catalyze long-term growth for Churchill Downs. The operator has a 50% stake<\/a> in a Richmond casino project and a growing number of HHR venues in the state. That proposed gaming venue is expected to have 1,800 slot machines, 100 table games, and a sportsbook.<\/p>\n

That\u2019s viewed as one of the \u201chigh ROI\u201d projects that underpin the long-term thesis for the gaming stock, supported by multiple factors.<\/strong><\/p>\n

\u201cWe recommend owning CHDN shares based on the following factors: (1) a best-in-class pipeline of likely high ROI expansion projects, with line of sight to rapid de-leveraging as growth capex tapers; (2) underappreciated organic growth drivers for CHDN’s HHR & recently acquired traditional casinos; (3) valuation upside for CHDN’s one-of-a-kind high-quality Derby asset; (4) emerging growth drivers for horse racing viewership, and an increasingly powerful flywheel and moat for CHDN’s market-leading live, historical, and online horse racing assets; and (5) a proven management team with a track record of highly disciplined capital allocation,\u201d concluded Stantial.<\/p>\n","protected":false},"excerpt":{"rendered":"

Churchill Downs (NASDAQ: CHDN) is mired in a slump that\u2019s seen the shares drop 16.08% over the past 90 days. But that tumble belies the company\u2019s compelling growth prospects. That\u2019s the take of Stifel analyst Jeffrey Stantial, who initiated coverage of the stock with a \u201cbuy\u201d rating and a $148 price target in a new […]<\/p>\n","protected":false},"author":46,"featured_media":272085,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69069,62,10,14577,1074],"tags":[81897,81903,81900,80968],"acf":[],"yoast_head":"\nChurchill Downs Top Gaming Growth Story, Says Stifel<\/title>\n<meta name=\"description\" content=\"Churchill Downs is a preferred gaming growth stock story, says Stifel analyst.\" \/>\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\/churchill-downs-top-gaming-growth-story-says-stifel\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Churchill Downs Top Gaming Growth Story, Says Stifel\" \/>\n<meta property=\"og:description\" content=\"Churchill Downs is a preferred gaming growth stock story, says Stifel analyst.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/churchill-downs-top-gaming-growth-story-says-stifel\/\" \/>\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=\"2023-10-02T21:03:52+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-10-03T02:10:55+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/05\/2022_derby_gate_eclipse.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\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\/churchill-downs-top-gaming-growth-story-says-stifel\/\",\"url\":\"https:\/\/www.casino.org\/news\/churchill-downs-top-gaming-growth-story-says-stifel\/\",\"name\":\"Churchill Downs Top Gaming Growth Story, Says Stifel\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/churchill-downs-top-gaming-growth-story-says-stifel\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/churchill-downs-top-gaming-growth-story-says-stifel\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/05\/2022_derby_gate_eclipse.jpg\",\"datePublished\":\"2023-10-02T21:03:52+00:00\",\"dateModified\":\"2023-10-03T02:10:55+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Churchill Downs is a preferred gaming growth stock story, says Stifel analyst.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/churchill-downs-top-gaming-growth-story-says-stifel\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/churchill-downs-top-gaming-growth-story-says-stifel\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/churchill-downs-top-gaming-growth-story-says-stifel\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/05\/2022_derby_gate_eclipse.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/05\/2022_derby_gate_eclipse.jpg\",\"width\":1200,\"height\":800,\"caption\":\"Horses break from the outside during the 148th Kentucky Derby on May 7, 2022. An analyst raised his price target on Churchill Downs, citing strength in historical racing machines, among other factors. 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