Wall Street Bets: Gaming & Leisure Properties, Boyd Gaming, Churchill Downs

Gaming and Leisure Properties exceeds expectations

Barry Jonas of Truist Securities looked at Gaming & Leisure Properties’ 3Q results October 25.

“GLPI’s Q3 adjusted funds from operations beat our/Street estimates by +2%/+1%, with management narrowing its adjusted funds from operations/share guide (no change to midpoint). More notably, GLPI announced it had reached an agreement with the Ione Band of Miwok Indians, representing the first Gaming real estate investment trust tribal deal. While the deal is a small $110 million loan that could convert to sale leaseback, we see gaming REIT expansion into tribal gaming (~40% of US GGR) as significant, having first highlighted the possibility back in February. We make modest tweaks to our model and keep our price target at $60. Reiterate Buy, seeing GLPI as well positioned for a potential increase in deal pipeline, now including tribal.”

Boyd Gaming on the upswing

According to J. P. Morgan analyst Joseph Greff, “Boyd’s 3Q24 EBITDAR of $337 million exceeded our $313 million estimate by 8%, or 4% excluding a one-time benefit in digital. Relative to our forecast, the biggest variances came out of its online (FanDuel market access fees, primarily) and its Managed & Other (management of the Sky River Casino in California), with its land-based casinos modestly ahead. Its Las Vegas locals segment reported in line with our recently lowered estimates, its Downtown Las Vegas segment was in line, with margin-driven related upside generated in its Midwest & South segment. Corporate expenses were also lower.  Boyd repurchased $202 million of its stock in the 3Q24, almost double the quarterly average over the last six quarters.”

Churchill Downs’ expansion plans

Jeffries analyst David Katz termed Churchill Downs 3Q24 results “another solid quarterly beat.”

“Renovations ahead of the 2025 Kentucky Derby are focused on upgrading 10,000 bleacher seats to 8,500 premium seats at the Starting Gate Pavilion,” Katz wrote. “Furthermore, management indicated the company plans on increasing the premium seat inventory by approximately 20% over the next four years. In our view, considerable opportunities for growth at Churchill Downs racetrack remain, supported by our expectations of EBITDA improvement in FY25 and FY26 (+8% and +7%, respectively).