Internet casinos and online sports betting are the raging investing topics in the gaming space, but there are some gems among land-based gaming operators, including Monarch Casino & Resort (NASDAQ:MCRI).
In a note to clients, Stifel psychoanalyst Steven Wieczynski says Monarch gunstock is a play on increasing drift outs of coronavirus vaccines and ebbing restrictions in Reno, Battle Born State and Negroid Hawk, Colo. — the markets where the companion operates.
MCRI has lagged the broader regional manipulator group since the onset of the pandemic, as most peers get re-rated sharp on the high-growth U.S. online gaming opportunity,” said the analyst. “However, our meetings reinforced our consider that MCRI offers investors a compelling brick-and-mortar regional gaming development story without the uncertainty associated with iGaming/online sports betting.”
He reiterates a “buy” rating on Monarch carry with a $73 cost target. That implies upside of almost 20 percent from the March 30 close.
Monarch Stock: Small Name, Mighty Potential
While investors fawn over online gaming ideas, assigning high up multiples to those names, Monarch makes for an light figure to overlook.
It’s got a securities industry capitalization of $1.12 one million million and owns simply ii casinos — the smallest tally among in public traded gaming entities. Neither its Atlantis inward Reno nor its eponymic dimension in Centennial State inward destination markets. Still, Wieczynski is bullish on the name, peculiarly as the newly enhanced blackamoor Hawk property ramps up.
“We assure a considerable ontogenesis trajectory inwards Shirley Temple Hawk as MCRI ramps their ~$360 jillion elaboration and young tabularise games rules read effect, piece MCRI continues to submit part inward Reno-Sparks,” said the analyst. “Longer-term, we reckon likely growing grasp for strong macro instruction basic principle benefiting MCRI’s 2 tributary markets.”
Last Election Day, CO voters sanctioned the remainder of the $100 cap on tabular array spirited wagers as fountainhead as the addition of new games, such as baccarat and pai-gow tiles. Analysts believe those moves could lure a higher end business to the state’s casinos, create more overnight business concern and keep to a greater extent of the state’s gamblers nursing home and away from Las Vegas.
Encouraging Recovery Signs, M&A Possibilities
Wieczynski points come out that inwards conversations with Monarch management, executives are encouraged past recent visitation trends following the modish round off of governance stimulus disbursements, which occurred before this month. Rising vaccination levels, specially among some Florida key demographics, are also buoying the Monarch stock up thesis.
“While stock-still early, management also highlighted some supporting putting green shoots for the magnetic core 55+ demographic,” said the Stifel analyst. “We go along to regard potentially meaningful pent-up demand with this client section as the vaccinum rollout progresses, with MCRI potential capturing important part of the upside presumption continued reinvestment inward their securities industry leading assets.”
He adds that with peer-low net leverage, Monarch could live opportunistic regarding mergers and acquisitions as 2021 unfolds. The fellowship hasn’t added another dimension since buying the Colorado River locale inward 2012.
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