Shares of Churchill Downs (NASDAQ: CHDN) jumped 3.74% in after-hours buying and selling Wednesday after the gaming firm reported file first-quarter gross sales and earnings that topped Wall Avenue estimates.
Churchill Downs’ new Terre Haute On line casino Resort. New venues are boosting the corporate’s outcomes. (Picture: Tribune-Star)
The operator of the famed Kentucky racetrack of the identical title mentioned it earned $1.08 a share on income of $590.9 million within the first three months of the 12 months. Analysts anticipated earnings of 76 cents on gross sales of $564 million. Churchill’s Kentucky historic horse racing phase drove a topline enhance in that unit of $33.1 million to $248.9 million. Stifel analyst Jeffrey Stantial highlighted power on the operator’s Virginia properties, together with historic racing machine (HRM) venues.
Compositionally, we argue outcomes proof our select list thesis, specifically highlighting 1) significant sequential acceleration for CHDN’s VA HRM properties (mid-December ability sport ban; enhancing HRM product), and a couple of) resilient working traits at Rivers,” wrote the analyst.
Stantial has a “purchase” score and $150 value goal on Churchill — forecasts which might be beneath assessment pending the corporate’s convention name with analysts on Thursday morning.
Dwell, Historic Racing, TwinSpires Increase Churchill Q1 Outcomes
Churchill Downs’ robust first-quarter outcomes have been supported by encouraging outcomes from the operator’s historic and dwell horse racing segments, in addition to from the TwinSpires on-line betting unit.
Within the January via March interval, Churchill’s historic and dwell horse racing income jumped 15% as earnings earlier than curiosity, taxes, depreciation, and amortization surged 23%. The gaming firm mentioned these metrics at TwinSpires elevated 18% and 35%, respectively, 12 months over 12 months.
These features come forward of the Kentucky Derby, which is scheduled for Saturday, Might 4. The one hundred and fiftieth version of the crown jewel in horse racing’s triple crown might be one other record-setter for Churchill this 12 months because the operator has made important investments, together with a brand new paddock and extra seating, at its eponymous Kentucky monitor to develop capability and lure extra prosperous bettors.
Stantial identified that HRM properties in Virginia confirmed probably the most year-over-year development, underscoring advantages for Churchill Downs, which is the biggest gaming operator in that state.
Talking of Virginia …
Be it by means of HRM venues or conventional gaming properties, Virginia figures prominently within the long-term Churchill Downs funding thesis.
Month-to-month information reported by VRC reveals significant sequential enchancment in Y/Y development throughout most of CHDN’s VA belongings, possible reflecting a mix of 1) annualization of latest provide headwinds, 2) mid-December implementation of a ban on aggressive ability video games, 3) enhancing HRM product & format at CHDN amenities, and 4) broader ramp at comparatively new properties,” famous Stantial.
The analyst additionally noticed that Churchill’s lately opened on line casino lodge in Terre Haute, Ind. is off to a powerful begin, and that venue is more likely to be mentioned in larger element on the convention name.
