Century Inventory on Hearth, However Analyst Sees Extra Upside
Posted on: April 8, 2021, 12:16h.
Final up to date on: April 8, 2021, 01:15h.
Century Casinos (NASDAQ:CNTY) inventory is up a scintillating 78 p.c year-to-date and 39.47 p.c over the previous month. Nevertheless it’s not costly.
That’s the view of Union Gaming analyst John DeCree, who reiterates a “purchase” ranking and $15 value goal on the regional gaming firm. The analyst’s value forecast implies upside of 32 p.c from the April 7 shut.
Regardless of the sharp restoration to begin the 12 months, we nonetheless see extra upside. CNTY remains to be one of many most cost-effective and most direct methods to play the reopening,” mentioned DeCree in a notice to shoppers at the moment.
Colorado-based Century owns a pair of eponymous venues in its residence state and operates casinos in Missouri and West Virginia. The corporate additionally controls gaming venues in Canada and has a two-thirds curiosity in an entity often called Casinos Poland Ltd.
Century Inventory: Margin Enlargement Story
By generally used metrics, Century is likely one of the smallest publicly traded US gaming operators. Its market capitalization is $306.38 million and it runs simply 4 home venues.
Regardless of that diminutive standing, Wall Road is broadly keen about Century inventory. Analysts spotlight the title not solely as a reopening winner, however one slated to profit from margin enlargement. When the corporate delivered fourth-quarter outcomes final month, it famous first-quarter traits seem optimistic, as extra gamblers within the 55+ age demographic get coronavirus vaccines and return to Century casinos.
Even with these good vibes and its latest stellar efficiency, Century inventory is cheap relative to friends and its personal historic norms.
Union Gaming’s DeCree says the shares commerce at 6x estimated 2022 earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA). That compares with a historic vary of 6.5x to 7x. The analyst provides Century is cheaper than friends as a result of buyers are assigning excessive multiples to operators with iGaming and on-line sports activities betting publicity — segments Century hasn’t closely penetrated as of but.
Coping with Headwinds
Century’s capability to reward buyers this 12 months is spectacular, because it comes in opposition to a nonetheless difficult backdrop owing to the COVID-19 pandemic.
The operator’s properties in Canada are scheduled to stay closed till no less than subsequent week. That timeline might be prolonged, because the Ontario provincial authorities earlier this week issued a brand new spherical of shelter-in-place directives.
Final month, Century introduced its Poland casinos shall be closed till no less than April 9. These venues have been briefly shuttered and reopened solely to be closed once more a number of instances over the previous a number of months.
The operator is trying to promote its stake in Casinos Poland, which accounted for only one p.c of its 2020 EBITDA.