On Tuesday, Scotiabank updated its outlook on shares of Gaming and Leisure (NASDAQ:GLPI) Properties Inc. (NASDAQ:GLPI), raising the price target to $50.00 from the previous $48.00, while maintaining a Sector Perform rating on the stock.
The adjustment reflects several key factors, including recent transactions, changes in the secured overnight financing rate (SOFR), and the financing of construction for Casino Queen Baton Rouge.
The bank's analyst highlighted the incorporation of new transactions into their evaluation, noting the impact on the company's financial projections. Moreover, a downward shift of approximately 20 basis points on average in the 2025 SOFR curve was considered in the updated estimates. The construction financing for the Casino Queen Baton Rouge was also factored into the revised financial outlook.
The revised estimates for Gaming and Leisure's adjusted funds from operations per share (AFFOPS) for the years 2024 and 2025 are now $3.76 and $3.93, up from the previous estimates of $3.74 and $3.85, respectively. These projections contribute to the rationale behind the new one-year price target of $50.00.
The price target is based on a 12.5 times multiple of the estimated 2025 AFFOPS, which has remained unchanged in Scotiabank's analysis. This valuation multiple is a key metric used by analysts to gauge the company's performance relative to its earnings.
In other recent news, Gaming and Leisure Properties Inc. has been involved in several significant developments. Mizuho raised its target for the company to $50 from $46, following an announcement of a $1.585 billion transaction with Bally's.
The deal includes an option on Bally's Lincoln Twin River, bringing the total deal value to approximately $2.3 billion. RBC Capital Markets also upgraded the company's target to $52 from $47, reflecting the Bally's transactions and projecting a 3% increase in estimates for 2025 due to the deal and lower costs associated with debt refinancing.
Meanwhile, Gaming and Leisure Properties is funding the relocation and renovation of the Belle of Baton Rouge casino in Louisiana, with an investment of up to $111 million. The project is expected to be completed by September 2025. The company has also been involved in a sale leaseback transaction involving three casinos, valued at $105 million, which was followed by Citi reaffirming its Buy rating on the company's shares.
Furthermore, Stifel has raised the price target for Gaming and Leisure and reiterated a Buy rating, following the company's acquisition of three casinos in Nevada and South Dakota, representing a total investment of $110 million.
In all these transactions, Gaming and Leisure Properties has demonstrated its strategic focus on acquisitions, renovations, and financial growth, aligning with its business strategy of acquiring and financing real estate for gaming operators under triple-net lease arrangements.
InvestingPro Insights
As Gaming and Leisure Properties Inc. (NASDAQ:GLPI) garners attention with Scotiabank's revised price target, real-time data from InvestingPro underscores the company's financial health and market performance. With a robust market capitalization of $13.76 billion and a P/E ratio of 18.13, GLPI's valuation reflects its solid earnings. The company's impressive gross profit margin stands at 94.3% for the last twelve months as of Q1 2024, signaling efficient operations and strong pricing power.
Investors should note the significant return GLPI has delivered over the last week, with a price total return of 9.87%. This momentum is part of a broader trend, with the stock achieving a 13.38% return over the last month and an 18.93% return over the last three months.
Such performance could be indicative of the stock's appeal in the current market, despite the fact that the RSI suggests the stock is in overbought territory. Moreover, GLPI is trading near its 52-week high, at 98.32% of this threshold, which may attract investors looking for stocks with strong uptrends.
For those seeking a deeper dive into GLPI's potential, InvestingPro offers additional insights. There are more InvestingPro Tips available, which could further inform investment decisions. To explore these tips and leverage the full suite of analytical tools, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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