{"id":28156,"date":"2020-10-13T07:20:33","date_gmt":"2020-10-13T15:20:33","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=28156"},"modified":"2020-10-16T07:16:34","modified_gmt":"2020-10-16T15:16:34","slug":"optimism-for-mgm-churchill-downs-cheap-rooms-riff-raff","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/optimism-for-mgm-churchill-downs-cheap-rooms-riff-raff\/","title":{"rendered":"Optimism for MGM, Churchill Downs; Cheap rooms = riff-raff"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

Although they remain relatively pessimistic on Macao<\/strong>, analysts at JP Morgan<\/strong> like MGM Resorts International<\/strong> sufficiently to raise their price target on its stock to $24\/share. The primary reason was “better than expected trends” at MGM’s regional U.S. casinos, followed by a higher cash-flow estimate for the Las Vegas Strip<\/strong>. Finally, MGM’s online-gaming prospects looked good enough to goose the stock to two-dozen dollars. “We could conceivably become more positive on MGM as an investment at lower levels, but look at current valuation as giving fair value to its regional portfolio, a multi-year LV Strip recovery (we think commences in 2H21\/4Q21), value for [MGM Growth Properties<\/strong>] and Macau, as well as its longer-term sports betting\/iGaming opportunity,” wrote Joseph Greff<\/strong>. Note that Greff says MGM is just going to have to hang in there on the Strip for another full year. Then things get better.<\/p>\n\n\n\n\n\n\n\n

Greff predicts MGM will be cash-flow negative this year but will generate $1.4 billion next year, $2.3 billion in 2022. Macanese returns this year and next will be negligible. But on balance, it’s a hopeful report.<\/p>\n\n\n\n

Greff’s colleague Daniel Politzer<\/strong> didn’t even wait for Churchill Downs<\/strong>‘ 3Q20 report to ratchet down his cash-flow projections by $41 million to an increment under $100 million. (The price target is still an impressive $185\/share.) As you may have anticipated, the underperforming Kentucky Derby<\/strong> is to blame. Other reasons for concern are that a number of capex expansions are on hold. No news yet on the company’s Waukegan<\/strong> casino\u2014the earnings call may disclose something from that front. Of his Derby estimates, Politzer wrote, “We prefer to be conservative here given the virus\/uncertain near-term outlook for large gatherings.” Casino gambling is expected to drive the largest portion of CHDN’s revenue this quarter, an estimated $63 million. The company also just opened two historical-racing parlors in Kentucky<\/strong>, whose impact won’t be fully felt until 4Q20. Despite all of his caution flags, Politzer bumped his price target up by seven bucks.<\/p>\n\n\n\n

\"\" Jottings<\/em><\/strong>: Remember what we said yesterday about cratering room rates on the Las Vegas Strip<\/strong>? Well, Las Vegas Metro<\/strong> is citing the $10\/night room as a contributing factor in the ongoing crime wave. Seems cheap rooms are bringing in the undesirables. Gov. Steve Sisolak<\/strong> (D) is in deep denial, saying, \u201cLas Vegas<\/strong> is a safe place to come, and I want to stress that to all of our visitors that are coming here. I am in discussion with the resort community.\u201d Discussing what, may we ask? And who in their right mind pays $64 to stay in a Super 8<\/strong> motel in Downtown<\/strong>? … Absinthe<\/em> returns to Caesars Palace<\/strong> on Oct. 28, with two shows a night Wednesday through Sunday. Caesars promises “Guests can expect a new cabaret-style seating format … which will allow parties of two to five to reserve tables positioned no less than six feet apart.” This, ladies and gentlemen, is the new normal … Paragon Gaming<\/strong> has lost CEO Scott Menke<\/strong>, deceased at age 59. Our thoughts are with his family … Tune into YouTube<\/strong> at 4 p.m. on the 24th to hear 60 Minutes<\/em> correspondent John Dickerson<\/strong> read from his book, The Hardest Job in the World<\/em>, a profile of the American presidency. It’s part of the 2020 Las Vegas Book Festival\u2019s Virtual Book Week and will be moderated by the Las Vegas Review-Journal<\/em>‘s Steve Sebelius<\/strong>. When I was at Las Vegas CityLife<\/em>, Steve was one of the best editors I ever had. When times are tough Sebelius has your back.<\/p>\n","protected":false},"excerpt":{"rendered":"

Although they remain relatively pessimistic on Macao, analysts at JP Morgan like MGM Resorts International sufficiently to raise their price target on its stock to $24\/share. The primary reason was “better than expected trends” at MGM’s regional U.S. casinos, followed … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[244,176,28,4,67,58,37,189,62,245,212,9,38],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/28156"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/comments?post=28156"}],"version-history":[{"count":3,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/28156\/revisions"}],"predecessor-version":[{"id":28411,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/28156\/revisions\/28411"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=28156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=28156"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=28156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}