Bally's Corp (NYSE: BALY) has retained its hold rating and an $18.25 price target from TD Cowen.
The firm's decision to not proceed with a $120 million investment for a new casino near Penn State was cited as a strategic move that should benefit the company.
According to the firm, this choice allows Bally's to concentrate more on its primary projects and maintain cash and financial flexibility.
The analyst from TD Cowen highlighted the positive outcomes of the decision, noting that it bolsters the company's financial position.
By avoiding the substantial investment, Bally's can redirect its resources and attention to core initiatives that are deemed more critical to its growth and stability.
Moreover, the firm expressed increased confidence in the timely completion of Bally's anticipated go-private transaction.
The transaction is expected to be finalized in the first half of 2025. The decision to cancel the casino project plays a significant role in reinforcing the analyst's belief in the successful closure of this deal.
Bally's Corp's choice to halt the development of the land-based casino is part of broader strategic efforts to optimize its operations.
The company's focus on preserving capital and flexibility is seen as a prudent approach amidst its ongoing projects and future plans.
In other recent news, Bally's Corporation has made significant strides in its operations, as evidenced by recent developments.
The company reported a moderate increase in its Q2 2024 earnings, with revenues rising 3% year-over-year to $622 million. However, the International Interactive segment experienced a 7% decline, primarily due to the market in Japan.
Bally's has also announced an amendment to its merger agreement, introducing a new Class A Common Stock. This amendment, approved by Bally's Board and a special committee of independent directors, is part of a larger merger transaction involving Bally's Corporation and entities controlled by Standard General L.P.
Further, Bally's has embarked on strategic moves, including a $940 million construction and financing deal for its Chicago casino, a merger with The Queen Casino & Entertainment Inc., and the redevelopment of the Tropicana site in Las Vegas. The company is also preparing for a licensing submission in New York for a new resort in 2025.
Despite these advances, Bally's expects an adjusted EBITDA loss of $30 million for the North America Interactive segment in 2024. The company also anticipates dealing with non-rated play challenges until 2027.
InvestingPro Insights
As Bally's Corp (NYSE:BALY) navigates its strategic decisions, real-time data from InvestingPro reveals a nuanced financial landscape. With a market capitalization of approximately $704.4 million, Bally's operates under a significant debt burden, which is reflected in its negative P/E ratio of -1.52, indicating that the company is not currently profitable. This aligns with the InvestingPro Tip that analysts do not anticipate the company will be profitable this year. Additionally, the company's revenue has shown modest growth over the last twelve months as of Q2 2024, with a 5.27% increase, suggesting some positive momentum in its operations.
However, it's important to note that Bally's management has been actively buying back shares, as highlighted by one of the InvestingPro Tips, which could be a sign of confidence from the company's leadership in its future prospects. Furthermore, the stock has experienced a strong return over the last three months, with a 54.04% price total return, and is trading near its 52-week high, currently at 97.77% of this peak. This could indicate investor optimism in the company's strategic moves, including the recent decision to cancel the Penn State casino project.
For investors considering Bally's Corp, there are additional InvestingPro Tips available, providing deeper insights into the company's financial health and market performance. Interested readers can find more tips to help inform their investment decisions on InvestingPro's dedicated page for Bally's Corp.
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