Full House Resorts (NASDAQ:FLL) stock could live the next impinge on among regional gaming equities, and the shares offer up important upside potential, says an analyst.
In a note to clients today, Roth Capital analyst Edward VI Engel restarts reportage of the Silver Slipper operator with a “buy” rating and a $16 toll target. That implies upside of 65.1 percent from the Nov. 26 close. The shares are upwards 1.75 percent inward early trading on Engel’s call.
FLL is transitioning from a micro-cap gaming gunstock to a subject operator of scale,” said the analyst. “Similar to gaming stocks making this modulation last-place decade, we expect FLL’s valuation to expand as its earnings before interest, taxes, depreciation and amortisation (EBITDA) doubles, and potentially triples o'er the next tierce to 4 years.”
In add-on to Bronco Billy’s inward Cripple Creek, Colo. and the Silver Slipper inwards Mississippi, Full House runs a partner off of gaming properties inwards Nevada and one inwards Indiana. The keep company is also inward the cognitive operation of completing Charmonix Casino Hotel, which testament be set conterminous to Bronco Billy’s.
Colorado, IL ‘Transformational’
Roth’s Engel says the Charmonix project, which is a higher-end locus than Bronco Billy’s, is expected to undecided inwards too soon 2023. That, on with Full House’s pursuit of an structured holiday resort inwards Waukegan, Ill., could follow major catalysts for the shares pile the road.
The analyst’s $16 damage butt includes $4 a portion out attributable to the Centennial State expansion, and $3.50, assuming the manipulator wins the Waukegan license. He notes Charmonix could motor 20 percent-plus proceeds on investment, as the locale could lure a higher-end patronage that indulges inward longer overnight stays and spends more cash. Engel also notes the add-on of a classier locale in Cripple Creek could boost tabulate gamey yields, bridging the crack with Negro Hawk — Colorado’s other gaming town.
In Illinois, the Waukegan throw could follow “transformational” for Full House, says Engel.
“We trust this chance offers 15 percent-plus take back on investment, where the propose is outside of Chicago and inward suburbs with low-toned gaming penetration,” notes the analyst. “Full House is spending $300 billion to $400 zillion here, which we believe offers an EBITDA chance of $55 million.”
He says IL regulators should pretend a decision on the Waukegan victor inward January. The analyst is assigning $2 a share to Full House’s terms due to Illinois, which implies 60 percent probability the manipulator is chosen to pass the Waukegan venue. Assuming that happens, the per-share value of that event grows to $3.50.
Bold Comparisons
Engel says Full House is the next regional gaming manipulator of scale, next inward the footsteps of the likes of Bally’s (NYSE:BALY), Golden Entertainment (NASDAQ:GDEN), and Eldorado Resorts, which is now Caesars Entertainment (NASDAQ:CZR).
Those companies and others saw EBTIDA multiples dual and three-base hit after Earnings Before Interest Taxes Depreciation and Amortization topped the $100 meg mark.
“By achieving scale, we believe Full House will exit this evolution rhythm as a higher lineament business, with a let down be of great and greater flexibleness to act on transformational developments and mergers and acquisitions opportunities,” concludes Engel.