{"id":316993,"date":"2024-04-10T17:03:01","date_gmt":"2024-04-10T22:03:01","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=316993"},"modified":"2024-04-11T09:53:56","modified_gmt":"2024-04-11T14:53:56","slug":"century-casinos-stock-punished-too-harshly-says-analyst","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/century-casinos-stock-punished-too-harshly-says-analyst\/","title":{"rendered":"Century Casinos Sell-Off Overdone, Free Cash Flow Enticing, Says Analyst"},"content":{"rendered":"

Shares of Century Casinos (NASDAQ: CNTY) joined the broader gaming equity complex to the downside Wednesday as the March reading of the Consumer Price Index (CPI) came in higher than expected, indicating inflation is proving more persistent than economists hoped.<\/p>\n

\"Rocky
Rocky Gap Casino Resort in Maryland. An analyst believes the selloff in operator Century Casinos is overdone. (Image: Oregon Live<\/em>)<\/figcaption><\/figure>\n

That concerning economic data point obfuscated some positive news pertaining to Century. In a new report to clients on Wednesday, Macquarie analyst Chad Beynon upgraded the regional casino stock to \u201coutperform\u201d from \u201cneutral\u201d while maintaining a $5 price target. That implies upside of almost 53% from Wednesday\u2019s closing price of $3.27.<\/p>\n

Beynon said the sell-off in the stock, which has seen it shed 32% since the end of last year while the Russell 2000 Index<\/a> is up 2% over that time, is overdone.<\/p>\n

In the past 18 months, OpCos have traded down 1.3x turns to 5.4x (OpCos down ~30%), while WholeCo multiples remained flat at 8.9x (WholeCos up 30%). Meanwhile, CNTY shares traded down from 4.8x to 3.6x (stock down 50%), the cheapest OpCo in our coverage universe (vs S&P 500 +38% and Russell 2K +17%),\u201d wrote Beynon.<\/p><\/blockquote>\n

Because it doesn\u2019t own all of the real estate on which its gaming venues reside, Century is considered an operating company (OpCo).<\/p>\n

Catalysts Abound for Century Casinos Rebound<\/h2>\n

With the stock currently struggling, there\u2019s increasing belief that Century is a 2025 story<\/a>, indicating investors may have to be patient with the name.<\/p>\n

\n

That patience could be rewarded because the operator could generate earnings before interest, taxes, depreciation, and amortization (EBITDA) of $168 million on revenue of $700 million next year, according to Beynon. With that comes the possibility that the operator could notch 85 cents a share in free cash flow — an impressive sum for a company with a $101 million market capitalization and a $3.27 share price.<\/p>\n<\/div>\n

Beynon sees Century\u2019s pair of Missouri casinos<\/a> as well as its Maryland and Reno venues acting as potential catalysts for the shares.<\/p>\n

\u201cSeveral near-term catalysts, including The Riverview opening (April 4), Poland re-licensing (currently run-rating ~$6m of EBITDA vs ~ $12m prior), and completion of Caruthersville (4Q24). Moreover, we now anniversary the takeovers of Rocky Gap (July 2023) and Nugget (April 2023), which had some initial learnings,\u201d observed the analyst.<\/p>\n

Century Casinos Has Growth, Value Traits<\/h2>\n

At the end of last year, Century\u2019s leverage stood at 4.9x, but that\u2019s expected to jump to 5.6x by the end of this year due to the operator\u2019s Missouri plans and efforts to ramp up the Nugget and Rocky Gap. However, that leverage ratio could decline to 4.8x \u201cmarking the largest one-year deleveraging in our coverage,\u201d noted Beynon.<\/p>\n

\n

Reducing debt could foster confidence among investors as could solid execution at the Maryland and Reno properties, which are viewed as integral to the long-term thesis on the stock.<\/p>\n<\/div>\n

\u201cCNTY is a unique value\/growth story with two renovation projects that we believe will earn a mid-teens return on $82mn spend. In addition, the Nugget and Rocky Gap acquisitions should further drive medium-term growth,\u201d concluded Beynon.<\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of Century Casinos (NASDAQ: CNTY) joined the broader gaming equity complex to the downside Wednesday as the March reading of the Consumer Price Index (CPI) came in higher than expected, indicating inflation is proving more persistent than economists hoped. That concerning economic data point obfuscated some positive news pertaining to Century. In a new […]<\/p>\n","protected":false},"author":46,"featured_media":228384,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10,33810],"tags":[81897,81903,81898],"acf":[],"yoast_head":"\nCentury Casinos Stock Punished Too Harshly, Says Analyst<\/title>\n<meta name=\"description\" content=\"Century Casinos Selloff Overdone, Free Cash Flow Enticing, Says 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\/century-casinos-stock-punished-too-harshly-says-analyst\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Century Casinos Stock Punished Too Harshly, Says Analyst\" \/>\n<meta property=\"og:description\" content=\"Century Casinos Selloff Overdone, Free Cash Flow Enticing, Says Analyst.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/century-casinos-stock-punished-too-harshly-says-analyst\/\" \/>\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=\"2024-04-10T22:03:01+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-11T14:53:56+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/RG.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"799\" \/>\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\/century-casinos-stock-punished-too-harshly-says-analyst\/\",\"url\":\"https:\/\/www.casino.org\/news\/century-casinos-stock-punished-too-harshly-says-analyst\/\",\"name\":\"Century Casinos Stock Punished Too Harshly, Says Analyst\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/century-casinos-stock-punished-too-harshly-says-analyst\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/century-casinos-stock-punished-too-harshly-says-analyst\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/RG.jpg\",\"datePublished\":\"2024-04-10T22:03:01+00:00\",\"dateModified\":\"2024-04-11T14:53:56+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Century Casinos Selloff Overdone, Free Cash Flow Enticing, Says Analyst.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/century-casinos-stock-punished-too-harshly-says-analyst\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/century-casinos-stock-punished-too-harshly-says-analyst\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/century-casinos-stock-punished-too-harshly-says-analyst\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/RG.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/RG.jpg\",\"width\":1280,\"height\":799,\"caption\":\"Century Casinos' Rocky Gap Casino in Maryland. The company is still looking to sell its Poland unit and could consider share repurchases. 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