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Century Stock Has Signficant Upside Forward, Suggests Analyst

Posted on: Could 1, 2021, 12:54h.

Previous up-to-date on: Might 1, 2021, 12:54h.

Just after soaring much more than 23 percent this week, Century Casinos (NASDAQ:CNTY) is up 106 % 12 months-to-date — conveniently making it 1 of the very best-undertaking gaming equities.

Century stock
Cripple Creek, Colo., home to a Century Casinos venue. An analyst sees additional upside ahead for the inventory. (Picture: Pinterest)

People just now getting the regional on line casino operator can consider heart due to the fact analysts see much more upside coming for the shares. In point, it was analyst commentary that sparked some of the stock’s surge this week as B. Riley’s David Bain initiated coverage of the gaming fairness with a “buy” score and an $18 selling price target. That implies appreciation possible of about 38 p.c from the April 30 close.

CNTY’s properties are locals-dependent, which we believe that are benefiting from many motorists in the existing ecosystem, which include the vaccine travel and fiscal stimulus,” said Bain in a take note to clientele.

Those people components coupled with the stock’s ascent affirm analysts and investors are prizing Century for its US exposure since the shares are soaring even as the operator contends with temporary closures of venues in Canada and Poland.

In the US, Century’s roster consists of a pair of casinos in its household condition of Colorado, as perfectly as Missouri and West Virginia.

Century Inventory Could Be Moved by Acquisitions

Even though Century’s portfolio of domestic houses is compact when compared to some rivals in the regional casino room, the operator is beloved by some analysts for the reason that management has a reputation for effectively integrating bolt-on acquisitions.

At the conclude of past calendar year, the company experienced $63.4 million in money on hand and with Century inventory soaring, it has forex to go buying. Moreover, there’s the commonly expected sale of its Poland property, which must carry in further money for deal-producing. B. Riley’s Bain claims the gaming enterprise could imminently return to its acquisitive means and that could probably bring about a much more than doubling of the share value.

“CNTY represents a scarce on line casino operator benefit engage in that could potentially double earnings prior to desire, taxes, depreciation, amortization, and restructuring or rent charges (EBITDAR) by means of domestic acquisitions by CY23E, creating for each-share benefit of about $28, in our see,” reported the analyst. “We believe CNTY’s next U.S. casino acquisition will be declared just before the stop of 3Q21, creating an approximated per-share price of $4, not reflected in our selling price target.”

Bain claims Century is probable reviewing “multiple US regional on line casino acquisition options,” but he did not get into particulars.

Additional Catalysts for Century Inventory

Yet another imminent catalyst for Century is implementation of better betting boundaries and introduction of new desk games in Colorado. That came about by way of passage of Amendment 77 last November and analysts and operators imagine the removing of the $100 wager cap will support casinos in the condition seize a for a longer time staying, increased stop clientele.

A further gain for Century is that its domestic venues are heavily frequented by locals — demographics that are wanting to invest stimulus income and get out of the dwelling right after getting coronavirus vaccinations.

We consider locals casinos are at the moment benefiting from pent-up demand from customers, greater capability allowances, the COVID vaccine rollout (driving a important older demographic back to the on line casino), close-to-dwelling entertainment, fiscal stimulus, and structural margin augmentation,” mentioned Bain.