With newly acquired venues becoming a member of its portfolio, Century Casinos (NASDAQ: CNTY) might submit important earnings progress over the subsequent two years.
The Century On line casino in Central Metropolis, Colo. An analyst is bullish on the operator’s shares. (Picture: Century Casinos)
That’s the decision from B. Riley analyst David Bain who, in a be aware to shoppers Monday, reiterated a “purchase” score and $13 worth goal on the Colorado-based regional on line casino operator. That worth forecast implies upside of 53.8% from at present’s closing print.
Bain acknowledges that he lowered his fourth-quarter earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) estimate on Century by about 15% to account for a multiweek closure on the operator’s Caruthersville, Mo. on line casino lodge. He additionally famous the momentary area at that venue carried out effectively.
Throughout 4Q22, Caruthersville was closed a number of weeks previous to CNTY opening a brief land-based facility forward of its new full new land-based on line casino lodge. The momentary facility’s GGR has been up Y/Y since opening and CNTY’s total portfolio January traits have been comparatively robust, in line with checks,” wrote the analyst.
The operator is spending $51.9 million to spruce up the Caruthersville venue. Century Casinos Caruthersville is the final riverboat on line casino in Missouri, and final yr acquired approval from the Missouri Gaming Fee to come back ashore. It’s one among two gaming venues within the state operated by Century, with the opposite being in Cape Girardeau.
Reno, Rocky Hole Might Enhance Century
Century Casinos was acquisitive in 2022, paying $195 million for Nugget Sparks on line casino and a 50% curiosity in the true property firm that owns the gaming venue. Later, it did a $56 million deal for the working rights to the Rocky Hole On line casino Resort in Flinstone, Md.
This yr would be the first full calendar that the venues are a part of the operator’s portfolio. That would stoke some EBITDA progress for the small-cap gaming firm.
“Our CY23E/CY24E EBITDA progress is 40%/23% as CNTY folds in acquired Reno and MD operations together with related enhancements, together with to the slot ground (Reno, MD), recreation combine (Reno, MD), loyalty membership (Reno, MD), façade (Reno), F&B (Reno) and synergies,” added Bain.
The Nugget Sparks acquisition might show significantly fruitful for Century. That’s as a result of it marks the operator’s entry into Nevada and in addition as a result of the Reno market is rising, affords favorable demographic traits, and the venue gained’t require an costly overhaul.
Century Casinos Might Pursue Extra Offers
Neither Bain nor the corporate confirmed as a lot, however given the operator’s documented historical past of good, bolt-on offers, that would pave the best way for one more acquisition in 2023.
That thesis is bolstered by Century’s latest departure from Bermuda and the chance that it might lastly offload its Casinos Poland stake to lift money for a home buy.
Moreover, some bigger operators with regional portfolios could possibly be compelled to unload what they view as lagging venues — properties Century has a penchant for selecting up and turning round. Shares of Century are already up 20.20% year-to-date.
