{"id":143844,"date":"2020-08-05T10:29:02","date_gmt":"2020-08-05T17:29:02","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=143844"},"modified":"2020-08-05T14:27:53","modified_gmt":"2020-08-05T21:27:53","slug":"red-rock-vegas-challenges-require-investors-patience-says-analyst","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/red-rock-vegas-challenges-require-investors-patience-says-analyst\/","title":{"rendered":"Red Rock Could Get Back to Basics, Potentially Benefiting Investors, Says Analyst"},"content":{"rendered":"

Shares of Red Rock Resorts (NASDAQ:RRR) are slumping today after the gaming operator revealed a murky outlook for four of its still closed Southern Nevada properties. But one analyst sees opportunity with the stock should management opt to return the company to its core competencies.<\/p>\n

\"Red
With the fate of the Palms still undecided, investors need to be patient with Red Rock Resorts, says an analyst. (Image: Las Vegas Review-Journal<\/em>)<\/figcaption><\/figure>\n

Following a better-than-expected second-quarter earnings report delivered yesterday after the close of US markets, Red Rock executives<\/a> were unable to give a definitive timeline as to when or if the Fiesta Henderson, Fiesta Rancho, Palms, and Texas Station will reopen, something that could be weighing on the stock today.<\/p>\n

In reiterating a \u201chold\u201d rating on Red Rock stock, Stifel analyst Steven Wieczynski said that management could eschew the glitz and frivolities of many non-gaming amenities that are so vital to Las Vegas Strip operators, and focus more on pure gaming.<\/p>\n

Seems like management is starting to think about changing their operating strategy moving forward and going back to more of the old Station Casino model, which focused more on customers and pure gaming versus all the fancy non-gaming amenities,\u201d<\/strong> Wieczynski said.<\/span><\/p><\/blockquote>\n

None of the aforementioned venues are on the Strip. But Station Casinos have exposure to Strip trends, which Wiecynski says could portend a \u201cprotracted cash flow recovery\u201d relative to rival regional gaming companies.<\/span><\/p>\n

Strip Exposure<\/span><\/h2>\n

Confounding operators with Strip exposure is that many travelers are reluctant to hop on planes to get to Las Vegas without a coronavirus vaccine.<\/a>\u00a0Even under the rosiest of assumptions, that scenario is unlikely to change until at least early to mid-2021.<\/span><\/p>\n

\n

Making matters tougher for the Sin City recovery trajectory is that following initial signs of pent-up demand during the early June reopening period, a second wave of COVID-19 cases hit California and Arizona. That prompted some operators to say demand from vital Las Vegas drive-in markets is declining<\/a>.<\/span><\/p>\n<\/div>\n

As Wieczynski notes, although Red Rock doesn’t operate Strip venues, the company is levered to the strength of that area.<\/span><\/p>\n

\u201cFrom a direct perspective, we are keenly focused on the company\u2019s hybrid properties, led by the Palms. We view the success of these properties as directly tied to the economic vibrancy along the Strip, which, in our view, raises the probability of a protracted recovery,\u201d he said.\u00a0<\/span><\/p>\n

He adds that one of the company’s core demographics is Strip staffers that frequent Station venues after their shifts. Until the fiscal health of that group improves, it will be difficult for Red Rock to make a full recovery<\/strong>.<\/span><\/p>\n

Problemed Palms<\/span><\/h2>\n

Red Rock management said Tuesday the fate of the Palms and the other still-closed casinos will largely be determined by demand trends at the company’s properties that are currently open. There was no mention of the Palms being sold, a rumor that popped earlier this year, but was subsequently put to rest by management.<\/span><\/p>\n

Wieczynski says it’s anyone’s guess how the investment community will react if the Palms isn’t reopened, or if it’s sold.<\/span><\/strong><\/p>\n

“We wonder how investors will react if The Palms isn\u2019t reopened or even eventually sold? <\/span>Would they applaud management for cutting ties, or put them in the penalty box because it was a bad use of capital?\u201d\u00a0<\/span><\/p>\n

He has a $14 price target on Red Rock stock, implying 16.6 percent upside from current levels. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of Red Rock Resorts (NASDAQ:RRR) are slumping today after the gaming operator revealed a murky outlook for four of its still closed Southern Nevada properties. But one analyst sees opportunity with the stock should management opt to return the company to its core competencies. Following a better-than-expected second-quarter earnings report delivered yesterday after the […]<\/p>\n","protected":false},"author":46,"featured_media":143847,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10],"tags":[],"acf":[],"yoast_head":"\nRed Rock Vegas Challenges Require Investors Patience, Says Analyst<\/title>\n<meta name=\"description\" content=\"Red Rock Resorts doesn't operate any venues on the Las Vegas Strip, but its recovery hopes are tethered to the success of that area.\" \/>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Red Rock Vegas Challenges Require Investors Patience, Says Analyst\" \/>\n<meta property=\"og:description\" content=\"Red Rock Resorts doesn't operate any venues on the Las Vegas Strip, but its recovery hopes are tethered to the success of that area.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/red-rock-vegas-challenges-require-investors-patience-says-analyst\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2020-08-05T17:29:02+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-08-05T21:27:53+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/palms2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/red-rock-vegas-challenges-require-investors-patience-says-analyst\/\",\"url\":\"https:\/\/www.casino.org\/news\/red-rock-vegas-challenges-require-investors-patience-says-analyst\/\",\"name\":\"Red Rock Vegas Challenges Require Investors Patience, Says Analyst\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/red-rock-vegas-challenges-require-investors-patience-says-analyst\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/red-rock-vegas-challenges-require-investors-patience-says-analyst\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/palms2.jpg\",\"datePublished\":\"2020-08-05T17:29:02+00:00\",\"dateModified\":\"2020-08-05T21:27:53+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Red Rock Resorts doesn't operate any venues on the Las Vegas Strip, but its recovery hopes are tethered to the success of that area.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/red-rock-vegas-challenges-require-investors-patience-says-analyst\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/red-rock-vegas-challenges-require-investors-patience-says-analyst\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/red-rock-vegas-challenges-require-investors-patience-says-analyst\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/palms2.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/palms2.jpg\",\"width\":1280,\"height\":720,\"caption\":\"With the fate of the Palms still undecided, investors need to be patient with Red Rock Resorts, says an analyst. 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