{"id":2511,"date":"2024-11-20T20:47:33","date_gmt":"2024-11-20T21:47:33","guid":{"rendered":"http:\/\/opiniao-publica24-7.com\/?p=2511"},"modified":"2024-11-27T15:30:56","modified_gmt":"2024-11-27T15:30:56","slug":"las-vegas-locals-casino-market-masking-weaknesses-says-analyst","status":"publish","type":"post","link":"http:\/\/opiniao-publica24-7.com\/index.php\/2024\/11\/20\/las-vegas-locals-casino-market-masking-weaknesses-says-analyst\/","title":{"rendered":"Las Vegas Locals Casino Market Masking Weaknesses, Says Analyst"},"content":{"rendered":"

On the surface, the Las Vegas locals\u2019 gaming market appears solid. Year to date, gross gaming revenue (GGR) is up 6%, which has prompted sell-side analysts to wax bullish on Boyd Gaming (NYSE: BYD) and Red Rock Resorts (NASDAQ: RRR), but at least one analyst says forecasts may be too rosy.<\/p>\n

\"Suncoast
Boyd Gaming\u2019s Suncoast Casino Hotel. An analyst says Wall Street is too enthusiastic about Las Vegas locals stocks. (Image: Boyd Gaming)<\/figcaption><\/figure>\n

Deutsche Bank\u2019s Carlo Santarelli departs from his colleagues\u2019 positivity on stocks tethered to the Las Vegas locals segment. In a recent note to clients, he pointed out that nearly all of that 6% topline growth is attributable to Red Rock\u2019s Durango Casino & Resort<\/a> in Southwest Las Vegas, which opened in December 2023. Strip out that property, and Las Vegas locals GGR is actually down 3% in 2024, he said.<\/p>\n

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Santarelli added that Durgano has cannibalized Red Rock Resort in Summerlin and some of the operator\u2019s other casinos, which \u201chas offset the favorable margin profile of Durango.\u201d<\/p>\n<\/div>\n

Red Rock executives addressed the issue earlier this year, noting that cannibalization isn\u2019t<\/a> expected to be a long-term hurdle. In May, CFO Stephen Cootey said on the company\u2019s first-quarter earnings conference call that population growth across the Las Vegas Valley can offset some of the lost business that Durango has taken from other Red Rock venues. There\u2019s credibility in that statement because the operator\u2019s planned new casino hotels in the area aren\u2019t close to Durango.<\/p>\n

Restrained Outlook on Boyd<\/h2>\n

Boyd Gaming is another example of an operator with Las Vegas locals exposure that Santarelli believes Wall Street is too hyped up about. To be fair, nine of the 16 analysts covering Boyd rate it the equivalent of a \u201chold,\u201d and unlike Red Rock, Boyd has geographic diversification.<\/p>\n

Wall Street is constructive on Boyd due in part to the operator\u2019s Las Vegas footprint and new projects<\/a>, but Santarelli believes the sell side\u2019s assumption that Boyd will shift from stalled to positive revenue growth ignores cracks in regional gaming markets.<\/p>\n

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Perhaps we are being conservative, but given the trajectory of the market, much like regional markets prior, which remain challenged, we don\u2019t see the pivot and resumption of same-store growth occurring in 2025,\u201d noted Santarelli.<\/p>\n<\/blockquote>\n

He estimates that Boyd\u2019s revenue and cash flow will drop 1.5% and 3.3%, respectively, next year.<\/p>\n

Wary on Red Rock Estimates, Too<\/h2>\n

As Santarelli pointed out, Red Rock is an example of a Las Vegas locals stock on which analysts may be too bullish<\/a>. Nine of the 14 analysts who cover it rate it \u201cbuy\u201d or \u201cstrong buy,\u201d but that belies the possibility the operator\u2019s cash flow and revenue will slightly decline next year.<\/p>\n

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This one is particularly curious in our view, given the relatively detailed color from management on the 3Q24 call, as well as the aforementioned underlying market dynamics,\u201d wrote Santarelli.<\/p>\n<\/blockquote>\n

He added that Red Rock would likely need to grow 2025 cash flow at a rate that currently looks hard to achieve to combat the effects of planned spending, including future Durango expansion.<\/p>\n

The post Las Vegas Locals Casino Market Masking Weaknesses, Says Analyst<\/a> appeared first on Casino.org<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

On the surface, the Las Vegas locals\u2019 gaming market appears solid. Year to date, gross gaming revenue (GGR) is up 6%, which has prompted sell-side analysts to wax bullish on Boyd Gaming (NYSE: BYD) and…<\/p>\n

Continue Reading “Las Vegas Locals Casino Market Masking Weaknesses, Says Analyst”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":2513,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[12],"tags":[],"_links":{"self":[{"href":"http:\/\/opiniao-publica24-7.com\/index.php\/wp-json\/wp\/v2\/posts\/2511"}],"collection":[{"href":"http:\/\/opiniao-publica24-7.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/opiniao-publica24-7.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/opiniao-publica24-7.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/opiniao-publica24-7.com\/index.php\/wp-json\/wp\/v2\/comments?post=2511"}],"version-history":[{"count":2,"href":"http:\/\/opiniao-publica24-7.com\/index.php\/wp-json\/wp\/v2\/posts\/2511\/revisions"}],"predecessor-version":[{"id":2514,"href":"http:\/\/opiniao-publica24-7.com\/index.php\/wp-json\/wp\/v2\/posts\/2511\/revisions\/2514"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/opiniao-publica24-7.com\/index.php\/wp-json\/wp\/v2\/media\/2513"}],"wp:attachment":[{"href":"http:\/\/opiniao-publica24-7.com\/index.php\/wp-json\/wp\/v2\/media?parent=2511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/opiniao-publica24-7.com\/index.php\/wp-json\/wp\/v2\/categories?post=2511"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/opiniao-publica24-7.com\/index.php\/wp-json\/wp\/v2\/tags?post=2511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}