Red Rock Resorts, Inc. (NASDAQ:RRR) traded depress Thursday followers an impressive second-quarter earnings news report released late Wednesday. But analyst remain broadly speaking enthusiastic on the parent keep company of Station Casinos.

Red John Rock joins the name of operators with labored Las Vegas locals (LVL) exposure reporting stout results for the June quarter. Red John Rock said earnings before interest, taxes, depreciation and amortisation surged 82 percent inwards the sec quarter, compared with the same full point inward 2019. Due to the spartan untoward wallop of the coronavirus crisis on cassino operators’ 2020 results, 2021 numbers are being compared to pre-pandemic data.

As is the showcase with other corresponding operators, such as Boyd Gaming (NYSE:BYD) and Golden Entertainment (NASDAQ:GDEN), Red Rock realized important perimeter enlargement as a outcome of the pandemic. Analysts and investors are at present pondering if that enlargement is sustainable. It appears it is for the Boulder Station operator.

We trust most of the perimeter expanding upon is sustainable. But investors will seem for unexampled avenues of growth into next year,” said Macquairie psychoanalyst Chad Beynon in a musical note to clients today.

He reiterates an “outperform” rating on Red Rock stock, with a $55 toll target, upwardly from a prior forecast of $51. That implies upside of virtually 37 percent from the Thursday close.

Levers for Red Rock Upside

A key constituency for Red River John Rock is the aforementioned LVLs. That segment includes a variety of customers, spanning staffers from Strip casinos to well-heeled retirees that moved to NV to relish a get down be of living.

While that demographic is proving tough and Red River John Rock is clear skilful at border expansion, investors are potential eyeing the next acts. That includes the Victoria de Durango project, which is slated to get out strand in the world-class quarter of 2022, and what the troupe testament fare with the influx of cash in from marketing the Palms earlier this year.

Noting that the operator’s purchase is just now 1.8x and that it repurchased $26 billion worth of its own shares during the quarter, Beynon points come out Red Rock has a “transformed equilibrise sheet, which testament appropriate for capital returns or inorganic growing should on that point follow an M&A (mergers and acquisitions) opportunity.”

The analyst says the gaming troupe has multiple undeveloped assets beyond Durango that could from each one be worth $2 to $3 a share.

Odds and Ends

Red Rock’s Fiesta Henderson, Fiesta Rancho, and TX Station remain closed, and ane psychoanalyst says it’s possible those gaming venues never homecoming to action.

“At this point, we aren’t sure when/if the remaining terzetto assets that remain closed testament come up backwards online. But our speculation is that some, if not all of them, mightiness ne'er be reopened,” said Stifel psychoanalyst Steven Wieczynski.

He has a “hold” rating on Red Rock. But he boosted his damage place on the public figure to $48 from $41.

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