Century Casinos (NASDAQ:CNTY) delivers fourth-quarter results tomorrow, and forrader of that report, an analyst is waxing bullish on the small-cap regional cassino operator.

In a short letter to clients, Stifel psychoanalyst Jeffrey Stantial reiterates a “buy” rating on Century, patch boosting his terms direct to $24 from $19, implying the carry tin can to a greater extent than double from the Mar 4 close. He says the shares are chinchy — a position that is unwarranted.

CNTY continues to cover implausibly chinchy congener to regional peers,” notes Stantial. “We get long matte CNTY’s price reduction is unwarranted, with increasing U.S. exposure (alongside a likely forthcoming Polska sale) likely helping tightlipped the crack to traditional regional manipulator multiples.”

The Colorado-based troupe reports fourth-quarter results prior to the undetermined of US markets on Tuesday. Analysts are calling for earnings per apportion of 16 cents on revenue of $103.88 million, which would grade a 22.5% year-over-year increase.

Lauding Nugget Sparks Acquisition

Last month, Century announced it’s getting Nugget Sparks casino and a 50 percent interest inwards the tangible estate fellowship that owns the prop for $195 million, scoring the operator’s initial displace into Nevada.

Century is draftsmanship praise for the deal, which is slated to tightlipped inwards the arcsecond quarter, because it will be directly accretive to earnings and will bolster unloose hard cash flow. Additionally, the Reno-Lake Tahoe expanse is rapidly growing, thanks in large division to an influx of folks from Northern Golden State seeking a take down be of living.

“We get seen increasing interest in the epithet since the deal announcement, precondition favourable investor views on the Reno market, FCF accretion, and synergism opportunity,” adds Stantial.

Reno is attracting companies, such as Amazon, Alphabet, Apple and Tesla, contributing to an unemployment range beneath ternion percent — far beneath NV and national averages. Based on Century’s free cash flowing yield, the Nugget buy could add together $2 a deal inward incremental note value to Century’s caudex price, according to Stantial.

Century Casinos Thesis Getting Cleaner

Following the recent sales event of the existent acres assets of its namesake Calgary gaming venue and other previous and pending transactions, Century will bring forth nearly three-quarters of its earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) from its US casinos.

Stantial adds that cleans upwards the investment thesis. That’s relevant at a clip when Canadian River casinos only when latterly shake off some coronavirus mandates, and as Century continues moving toward a sales agreement of its two-thirds stakes in Casinos Poland, which could bring forth hard cash for to a greater extent domestic help deal-making.

“Meanwhile, the fellowship remains intermeshed in discussions to monetise their Poland assets, which we await will farther improve the story granted the negative perceptions towards the trading operations (volatile licensing framework, 50% gaming task rate, marketing restrictions, special line checks, etc.),” concludes Stantial.