Century Stock Has Signficant Upside Forward, Suggests Analyst

Posted on: May well 1, 2021, 12:54h.

Very last current on: Might 1, 2021, 12:54h.

Just after soaring additional than 23 % this week, Century Casinos (NASDAQ:CNTY) is up 106 p.c year-to-day — effortlessly building it a person of the greatest-carrying out gaming equities.

Century stock
Cripple Creek, Colo., home to a Century Casinos venue. An analyst sees a lot more upside forward for the inventory. (Image: Pinterest)

These just now identifying the regional casino operator can just take heart mainly because analysts see more upside coming for the shares. In fact, it was analyst commentary that sparked some of the stock’s surge this week as B. Riley’s David Bain initiated protection of the gaming equity with a “buy” score and an $18 price target. That indicates appreciation possible of about 38 per cent from the April 30 near.

CNTY’s qualities are locals-based mostly, which we imagine are benefiting from several motorists in the present-day environment, together with the vaccine generate and fiscal stimulus,” stated Bain in a notice to clients.

Those people aspects coupled with the stock’s ascent validate analysts and investors are prizing Century for its US publicity due to the fact the shares are soaring even as the operator contends with short term closures of venues in Canada and Poland.

In the US, Century’s roster is composed of a pair of casinos in its home condition of Colorado, as effectively as Missouri and West Virginia.

Century Inventory Could Be Moved by Acquisitions

While Century’s portfolio of domestic qualities is tiny in contrast to some rivals in the regional casino area, the operator is beloved by some analysts for the reason that administration has a status for successfully integrating bolt-on acquisitions.

At the conclusion of very last year, the corporation experienced $63.4 million in money on hand and with Century inventory soaring, it has currency to go procuring. Additionally, there’s the broadly expected sale of its Poland property, which should really provide in additional funds for deal-creating. B. Riley’s Bain states the gaming enterprise could imminently return to its acquisitive approaches and that could perhaps trigger a extra than doubling of the share selling price.

“CNTY represents a scarce on line casino operator benefit enjoy that could possibly double earnings in advance of curiosity, taxes, depreciation, amortization, and restructuring or lease expenditures (EBITDAR) as a result of domestic acquisitions by CY23E, creating per-share value of around $28, in our view,” explained the analyst. “We believe CNTY’s upcoming U.S. casino acquisition will be introduced in advance of the close of 3Q21, producing an approximated for every-share value of $4, not reflected in our price concentrate on.”

Bain claims Century is very likely reviewing “multiple US regional casino acquisition possibilities,” but he did not get into details.

Far more Catalysts for Century Stock

One more imminent catalyst for Century is implementation of greater betting limitations and introduction of new desk games in Colorado. That arrived about through passage of Amendment 77 previous November and analysts and operators believe the removal of the $100 wager cap will aid casinos in the point out seize a more time staying, greater conclusion clientele.

An additional gain for Century is that its domestic venues are heavily frequented by locals — demographics that are on the lookout to expend stimulus dollars and get out of the household right after receiving coronavirus vaccinations.

We think locals casinos are presently benefiting from pent-up need, enhanced potential allowances, the COVID vaccine rollout (driving a key more mature demographic back again to the casino), near-to-dwelling enjoyment, fiscal stimulus, and structural margin augmentation,” said Bain.