On Wednesday, Mizuho Securities adjusted its price target on Red Rock Resorts (NASDAQ: NASDAQ:RRR) shares, increasing it to $67.00 from the previous figure of $66.00. The firm has maintained an Outperform rating on the stock, signaling confidence in the company's performance.
The update follows Mizuho's analysis of Red Rock Resorts' expected financial results. The firm's projection for the company's second-quarter EBITDA is $203 million, which stands above the Street's consensus of $193 million. Mizuho's forecast does not factor in potential market share gains by Red Rock Resorts, which could further improve the financial outcome.
Mizuho's assessment suggests that Red Rock Resorts' current valuation is reasonable. The company's shares are trading at multiples of 11.0 times and 10.5 times the firm's estimated EBITDA for the first and second fiscal years, respectively.
These multiples are within the historical range of 9 to 12 times for the company. The firm believes that this valuation is justified, considering the development opportunities Red Rock Resorts has within the local markets.
The sentiment towards the local gaming sector has been weak, but Mizuho observes improving trends and believes that expectations for Red Rock Resorts are modest. Given these factors, the firm finds the stock to be an especially attractive investment as the second quarter approaches.
In other recent news, Red Rock Resorts has been making notable strides in its operations. The company marked a remarkable start to 2024, posting its strongest first-quarter financial results ever, driven by robust performance in Las Vegas and the successful opening of the Durango Casino Resort. The net revenue climbed to $485.6 million, a 12.9% increase year-over-year, and an adjusted EBITDA increase of 7.3% to $229.8 million was also observed.
BofA Securities recently adjusted its stance on Red Rock Resorts, upgrading the stock from Underperform to Neutral, despite a reduction in the price target to $55.00 from the previous $57.00.
This shift in rating follows a 15% decline in the company's shares, which was attributed to a weakening local market in Las Vegas and Red Rock Resorts' first-quarter results meeting consensus expectations but not surpassing high anticipations.
Despite some market challenges, Red Rock Resorts does not appear to be experiencing the same issues in their specific sub-markets. BofA Securities has revised its 2024 estimates for Red Rock Resorts, acknowledging weaker trends in the local customer base but offsetting this partially with the anticipated performance of Durango.
Furthermore, the company has significant development projects underway and is laying the groundwork for continued growth and expansion in the Las Vegas market. These recent developments underscore the company's commitment to reinvesting in its portfolio and pursuing strategic land acquisitions, positioning it for sustained growth.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.