{"id":331066,"date":"2024-09-19T18:05:00","date_gmt":"2024-09-19T23:05:00","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=331066"},"modified":"2024-09-19T18:05:00","modified_gmt":"2024-09-19T23:05:00","slug":"red-rock-could-be-boosted-by-lower-interest-rates-says-analyst","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/red-rock-could-be-boosted-by-lower-interest-rates-says-analyst\/","title":{"rendered":"Red Rock Could Be Boosted by Lower Interest Rates, Says Analyst"},"content":{"rendered":"

On Wednesday, the Federal Reserve lowered interest rates by half a percent — the central bank\u2019s first rate cut in four years — sparking hope of a prolonged rally for capital-intensive casino operators, including Red Rock Resorts (NASDAQ: RRR).<\/p>\n

\"red
Red Rock Casino-Resort. An analyst said the company could benefit from lower interest rates. (Image: YouTube)<\/figcaption><\/figure>\n

At least one analyst sees the Green Valley Ranch<\/a> operator as one of the gaming companies most positively levered to monetary easing by the Fed. In a new report to clients, Deutsche Bank analyst Carlo Santarelli highlighted Red Rock as one of the prime lower rate beneficiaries in his coverage universe, though he acknowledged the stock could face some \u201coverhang\u201d attributable to uncertainty surrounding the upcoming presidential election.<\/p>\n

\n

Santarelli noted lower interest rates could spur faster development of Red Rock\u2019s planned casino hotel in the Inspirada community in Henderson, Nevada. Though not mentioned directly by the analyst, it\u2019s possible that lower borrowing costs could assist Red Rock in expediting expansion plans<\/a> at the Durango Casino & Resort in Southwest Las Vegas — the operator\u2019s newest gaming venue.<\/p>\n<\/div>\n

Durango expansion is expected to cost $120 million and previously announced enhancements for Green Valley Ranch could result in 2025 spending $75 million, confirming Red Rock is indeed correlated to the Fed\u2019s interest rate policy.<\/strong><\/p>\n

Why Lower Rates Matter to Red Rock<\/h2>\n

Lower interest rates are relevant to the Red Rock investment thesis for other reasons. All of the operator\u2019s existing venues are in Las Vegas and lower borrowing costs could stoke renewed vibrancy in the local housing market while potentially providing some relief to consumers.<\/p>\n

There\u2019s optimism around rate cuts and the positive tailwind it could have on housing and continued growth on the geographic periphery of the locals market,\u201d wrote Santarelli.<\/p><\/blockquote>\n

Key demographics in the Las Vegas locals segment<\/a> include employees of rival gaming companies and construction workers, further underscoring Red Rock\u2019s potential benefits from lower interest rates as well as the operator\u2019s exposure to promotional trends in the market.<\/p>\n

\u201cThe locals promotional environment remains active, though unchanged on a sequential basis,\u201d added Santarelli. \u201cValuation remains attractive, with RRR offering about a 10% free cash flow yield on the core operations and the development pipeline is unparalleled within the gaming space.\u201d<\/strong><\/p>\n

Tribal Casino Could Add to Red Rock Investment Case<\/h2>\n

Investors — accurately so — have long viewed Red Rock as a Las Vegas play. As a result, the stock currently isn\u2019t getting much, if any, credit for the operator\u2019s management agreement for the North Fork Mono Casino & Resort in Madera, Calif.<\/p>\n

Construction on that tribal casino recently started<\/a> with a targeted opening date of sometime in 2026. Santarelli said that when that project stabilizes, Red Rock could generate $40 million to $50 million in yearly management fees, which would be equivalent to $1 to $2 in added value to the stock price.<\/p>\n

\u201cWe expect Red Rock to begin the construction-financing process in the coming weeks, with financing potentially secured in the November time frame,\u201d Santarelli said. \u201cRed Rock has extended about $60 million to the tribe over the years and this amount will likely increase in the coming months. At present, given accrued interest, Red Rock is owed about $120 million, which could be returned upon the receipt of construction financing.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

On Wednesday, the Federal Reserve lowered interest rates by half a percent — the central bank\u2019s first rate cut in four years — sparking hope of a prolonged rally for capital-intensive casino operators, including Red Rock Resorts (NASDAQ: RRR). At least one analyst sees the Green Valley Ranch operator as one of the gaming companies […]<\/p>\n","protected":false},"author":46,"featured_media":248555,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,81886,18456],"tags":[81903,23,81862],"acf":[],"yoast_head":"\nRed Rock Could Be Boosted by Lower Interest Rates, Says Analyst<\/title>\n<meta name=\"description\" content=\"Red Rock Could Be Boosted by Lower Interest Rates, 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\/red-rock-could-be-boosted-by-lower-interest-rates-says-analyst\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Red Rock Could Be Boosted by Lower Interest Rates, Says Analyst\" \/>\n<meta property=\"og:description\" content=\"Red Rock Could Be Boosted by Lower Interest Rates, Says Analyst.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/red-rock-could-be-boosted-by-lower-interest-rates-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=\"2024-09-19T23:05:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/12\/RRR.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\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\/red-rock-could-be-boosted-by-lower-interest-rates-says-analyst\/\",\"url\":\"https:\/\/www.casino.org\/news\/red-rock-could-be-boosted-by-lower-interest-rates-says-analyst\/\",\"name\":\"Red Rock Could Be Boosted by Lower Interest Rates, Says Analyst\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/red-rock-could-be-boosted-by-lower-interest-rates-says-analyst\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/red-rock-could-be-boosted-by-lower-interest-rates-says-analyst\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/12\/RRR.jpg\",\"datePublished\":\"2024-09-19T23:05:00+00:00\",\"dateModified\":\"2024-09-19T23:05:00+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Red Rock Could Be Boosted by Lower Interest Rates, Says Analyst.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/red-rock-could-be-boosted-by-lower-interest-rates-says-analyst\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/red-rock-could-be-boosted-by-lower-interest-rates-says-analyst\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/red-rock-could-be-boosted-by-lower-interest-rates-says-analyst\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/12\/RRR.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/12\/RRR.jpg\",\"width\":1280,\"height\":720,\"caption\":\"Red Rock Casino-Resort. 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