Gaming stocks are up at an average of 4% since earnings amid mixed performance, which reflects investor positioning ahead of earnings, BofA Securities said in a Monday note.
VICI Properties (VICI) posted a Q3 beat and guidance raise, with revenue of $1.07 billion and adjusted funds from operations of $685 million compared with BofA's estimate of $1.06 billion in revenue and AFFO of $676 million, according to the note. The company's board authorized a $2 billion share repurchase program in October, but BofA analysts see it as "opportunistic" and not an indicator of its growth pipeline.
Gaming and Leisure Properties (GLPI) reported Q3 revenue of $435 million and AFFO per share of $1.04, which is in line with BofA's estimate of $434 million in revenue and AFFO per share of $1.04, the firm noted. Investor focus remains largely on the Bally's Chicago casino resort, which continues construction progress with around 1,000 workers on site, the analysts said.
Churchill Downs (CHDN) posted a Q3 beat with revenue of $696 million compared with BofA's estimate of $683 million, driven by strength in its Gaming segment, BofA said. The company announced an expansion of the Thoroughbred Championship Series to include female horses, and the analysts said they look forward to learning more about sponsorship and broadcasting rights for the league.
To date, three gaming firms have beat expectations, three have missed consensus estimates, and one has posted in-line results, according to the note.
BofA maintained the stock rating of Churchill Downs at buy and raised the price target to $105 from $100. VICI and Gaming and Leisure were maintained at buy and underperform, respectively, with corresponding price targets of $34 and $46.
Price: 24.68, Change: +0.22, Percent Change: +0.92
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