Shares of Monarch Casino & Resort (NASDAQ: MCRI) could live steady though substantial upside could be tough to amount by over the near-term.
That’s the make of Stifel psychoanalyst Jeffrey Stantial followers the regional casino operator’s first-quarter earnings report, which was delivered belatedly Wednesday. Overall, results were self-coloured at Monarch’s II cassino hotels — Atlantis inward Reno, Nevada and a namesake dimension inwards Shirley Temple Black Hawk, Colo. But Stantial said the stockpile could hampered past broader regional casino headwinds.
However, until broader regional gaming uneasiness and/or militant headwinds inwards Reno improve, we bump it hard to warrant upside to estimates and/or multiple,” wrote the analyst.
He reiterated a “hold” rating on the inventory with a $72 terms target, implying upside of 8.2% from today’s fill up at $66.54. Shares of Monarch are away nearly 6% o'er the past times month and 3.77% year-to-date. The companionship told analysts and investors it repurchased $19.4 1000000 worth of its own shares in the world-class 3 months of the year.
Monarch Casino Dealing with Headwinds
As metric past keep down of properties owned, Monarch Casino & Resort is the smallest U.S.-listed gambling casino stock. The manipulator runs Atlantis inwards Reno, Nev., and its eponymous locus in the fast-growing Negroid Hawk, Colo. market.
In Reno, Monarch has been dealing with elevated promotional activity by rivals over the yesteryear several quarters as comfortably as increased rivalry from Tribal operators inwards nearby markets inward Northern California. Stantial notes it’s possible that the 2nd half of this year testament take easier comparables for Monarch as rivals’ promotional outlay eases a bit.
“Coupled with payoff on hotel elbow room remodels (~125 rooms will live ruined past terminal of Q2) & intact structural economical tailwinds, this suggests potential accelerating topline development assuming horse barn consumer trends & competitor promotional behavior,” observed the analyst.
Stantial also pointed come out that a 7% lower limit remuneration step-up inwards Nevada, scheduled for July 1, and rivals’ promotional plans could create it hard for Monarch to leveraging pricing force at its Reno property.
Somewhat Bullish on Black Hawk
Monarch executives told analysts the troupe is adding market portion inwards Colorado, especially among mid- to high-tier bettors and there’s ease copious way left to make more part among VIPs. That could be a signal that the operator’s investments inwards Negro Hawk are paying off.
Previous expenditures at its casino hotel thither could establish good over the long-term because CO is rapidly adding universe and some competitors inwards Black person Hawk are also enhancing their gaming properties.
“Our checks suggest continued levelheaded pricing powerfulness for MCRI’s market-leading non-gaming amenities, inward particular for the hotel business organisation (consolidated hotel revenues were +8.4% Y/Y). Medium-term, we preserve to highlight forthcoming elbow room renovations at nearby Ameristar as a potency positively charged accelerator for mean(a) day-by-day rates,” concluded Stantial.