{"id":280949,"date":"2023-07-12T15:36:36","date_gmt":"2023-07-12T20:36:36","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=280949"},"modified":"2023-07-13T13:15:18","modified_gmt":"2023-07-13T18:15:18","slug":"churchill-downs-mgm-could-lead-gaming-stock-gains","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/","title":{"rendered":"Churchill Downs, MGM Among Top Gaming Equity Ideas Ahead of Q2 Earnings"},"content":{"rendered":"

Second-quarter earnings season kicked off this week, and it\u2019s just a matter of days before gaming companies step into the earnings confessional.<\/p>\n

\"casino
New Year’s revelers on the Las Vegas Strip. An analyst says gaming equities could deliver on Q2 earnings reports. (Image: Las Vegas Metropolitan Police Department)<\/figcaption><\/figure>\n

In aggregate, gaming equities lagged the S&P 500 in the first half of the year. But Churchill Downs (NASDAQ: CHDN) and MGM Resorts International (NYSE: MGM) could be among the industry\u2019s winners in earnings season and beyond. That\u2019s the take of Macquarie analyst Chad Beynon, who highlighted that pair, among others, in a wide-ranging report to clients on Wednesday.<\/p>\n

As we look into 2H23E, we expect Gaming stock outperformance given stable fundamentals and discounted valuations,\u201d<\/strong> wrote the analyst. \u201cHistorically, the sector has strong macro correlations, but fundamentals have recently outpaced inflation given overall wealth creation particularly with older age cohorts.\u201d<\/strong><\/p><\/blockquote>\n

Published Wednesday, the June reading of the Consumer Price Index (CPI) showed an increase of just 0.2% on a month-over-month basis, which is less than economists expected. While rampant government spending forced inflation to multi-decade highs last year, it is now cooling, and that easing could be a plus for the Las Vegas Strip<\/a> and regional casino operators.<\/p>\n

Churchill Downs: Regional Standout<\/h2>\n

While Churchill Downs has no Las Vegas Strip exposure and there are lingering concerns<\/a> about the state of the U.S. horse racing industry, the stock is a gaming favorite on Wall Street.<\/p>\n

\n

Beynon anointed the stock one of his top ideas for the second half<\/a>, calling it a standout among regional gaming companies due to a robust pipeline and a projected three-year compound annual growth rate of 20%-plus. That\u2019s the highest in the analyst’s coverage universe, excluding Macau casino equities.<\/p>\n<\/div>\n

In addition to the ongoing ramping of assets that came online last year, other drivers of the Churchill Downs investment thesis include enhancements at its eponymous, storied Kentucky racetrack, as well as historical horse racing machine (HRM) and regional casino expansion across multiple states.<\/p>\n

\u201cThis well-diversified growth includes 1) Turn 1 experience; 2) DCG expansion\/hotel; 3) LA HRMs in OTBs; and 4) DCG Downtown Louisville, in addition to ramping assets from 2022. In 2024, we expect $190m+ of additional project return EBITDA from 1) the Paddock project; 2) Queen of Terre Haute, 3) P2E growth (Dumfries, Rosie\u2019s Emporia, other HRMs); and 4) Chaser\u2019s (NH), as well as $35m from the Exacta Systems deal,\u201d observed Beynon.<\/p>\n

Vegas Vibes Strong for MGM<\/h2>\n

Up 40.35% this year, MGM is one of the gaming equities outpacing the broader market — a performance driven in part by the resilient Las Vegas Strip, as well as the Macau resurgence<\/a>.<\/p>\n

\n

Beynon lauded the operator for \u201cupmarket\u201d moves in Sin City, including the acquisition of Cosmopolitan and the sale of the Mirage. Those transactions increase MGM\u2019s leverage to luxury consumers that are often less vulnerable to economic downturns. The analyst added that BetMGM is thriving, and said investors may not be fully appreciating the operator\u2019s Macau exposure.<\/p>\n<\/div>\n

\u201cFor digital, we expect BetMGM to grow revenue ~35% in 2023 and continue to believe there are opportunities to solve for the 50\/50 stake. With one of the strongest balance sheets, supportive shareholders, and a goal to be a global digital leader, we expect this opportunity to solve the stake issue to be a priority,\u201d concluded the Beynon.<\/p>\n

Translation: MGM owns 50% of BetMGM, with Entain controlling the other half. But the former now has the resources to potentially buy the latter out of that arrangement.<\/p>\n","protected":false},"excerpt":{"rendered":"

Second-quarter earnings season kicked off this week, and it\u2019s just a matter of days before gaming companies step into the earnings confessional. In aggregate, gaming equities lagged the S&P 500 in the first half of the year. But Churchill Downs (NASDAQ: CHDN) and MGM Resorts International (NYSE: MGM) could be among the industry\u2019s winners in […]<\/p>\n","protected":false},"author":46,"featured_media":259983,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10,14577,81886,1074],"tags":[81897,81903,81900,23,80968],"acf":[],"yoast_head":"\nChurchill Downs, MGM Could Lead Gaming Stock Gains<\/title>\n<meta name=\"description\" content=\"Churchill Downs, MGM could be gaming equity earnings season winners.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Churchill Downs, MGM Could Lead Gaming Stock Gains\" \/>\n<meta property=\"og:description\" content=\"Churchill Downs, MGM could be gaming equity earnings season winners.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/\" \/>\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=\"2023-07-12T20:36:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-07-13T18:15:18+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/FlXmJchaMAAYVTp.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\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\/churchill-downs-mgm-could-lead-gaming-stock-gains\/\",\"url\":\"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/\",\"name\":\"Churchill Downs, MGM Could Lead Gaming Stock Gains\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/FlXmJchaMAAYVTp.jpg\",\"datePublished\":\"2023-07-12T20:36:36+00:00\",\"dateModified\":\"2023-07-13T18:15:18+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Churchill Downs, MGM could be gaming equity earnings season winners.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/FlXmJchaMAAYVTp.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/FlXmJchaMAAYVTp.jpg\",\"width\":1200,\"height\":800,\"caption\":\"The Las Vegas Strip. The American Gaming Association said the industry drove $329 billion in economic activity last year. (Image: Las Vegas Metropolitan Police Department)\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"News\",\"item\":\"https:\/\/www.casino.org\/news\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Financial\",\"item\":\"https:\/\/www.casino.org\/news\/financial\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Churchill Downs, MGM Among Top Gaming Equity Ideas Ahead of Q2 Earnings\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.casino.org\/news\/#website\",\"url\":\"https:\/\/www.casino.org\/news\/\",\"name\":\"Casino.org\",\"description\":\"Latest Casino and Gaming News\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.casino.org\/news\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\",\"name\":\"Todd Shriber\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cropped-11-96x96.png\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cropped-11-96x96.png\",\"caption\":\"Todd Shriber\"},\"description\":\"Todd Shriber is a senior news reporter covering gaming financials, casino business, stocks, and mergers and acquisitions for Casino.org. Todd got his start in financial markets as a reporter with Bloomberg News. Later, he became a trader at a Southern California-based long\/short hedge fund, where he specialized in the trading sector and international ETFs leading up to and during the financial crisis. He joined Casino.org in 2019. Currently, Todd analyzes, researches, and writes on ETFs for various web-based publications and financial services firms. Shriber has been featured and quoted in Barron's, CNBC.com, and The Wall Street Journal. His work can also be found on Benzinga, ETF Daily News, ETF Trends, MarketWatch, Fox Business, and Nasdaq.com. He currently resides in Las Vegas, where he enjoys golf and taking his black lab to the dog park. He's also an avid sports fan and likes to wager on college football and the NBA. You can also find him at the three-card poker and roulette table, even though he knows better. Contact Todd at todd.shriber@casino.org.\",\"sameAs\":[\"https:\/\/muckrack.com\/todd-shriber\",\"https:\/\/www.linkedin.com\/in\/toddshriber\/\",\"https:\/\/x.com\/etfgodfather\"],\"url\":\"https:\/\/www.casino.org\/news\/author\/todd-shriber\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Churchill Downs, MGM Could Lead Gaming Stock Gains","description":"Churchill Downs, MGM could be gaming equity earnings season winners.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/","og_locale":"en_US","og_type":"article","og_title":"Churchill Downs, MGM Could Lead Gaming Stock Gains","og_description":"Churchill Downs, MGM could be gaming equity earnings season winners.","og_url":"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/","og_site_name":"Casino.org","article_publisher":"https:\/\/www.facebook.com\/Casino.OrgNews","article_published_time":"2023-07-12T20:36:36+00:00","article_modified_time":"2023-07-13T18:15:18+00:00","og_image":[{"width":1200,"height":800,"url":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/FlXmJchaMAAYVTp.jpg","type":"image\/jpeg"}],"author":"Todd Shriber","twitter_card":"summary_large_image","twitter_creator":"@etfgodfather","twitter_site":"@Casino_Org","twitter_misc":{"Written by":"Todd Shriber","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/","url":"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/","name":"Churchill Downs, MGM Could Lead Gaming Stock Gains","isPartOf":{"@id":"https:\/\/www.casino.org\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/#primaryimage"},"image":{"@id":"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/#primaryimage"},"thumbnailUrl":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/FlXmJchaMAAYVTp.jpg","datePublished":"2023-07-12T20:36:36+00:00","dateModified":"2023-07-13T18:15:18+00:00","author":{"@id":"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85"},"description":"Churchill Downs, MGM could be gaming equity earnings season winners.","breadcrumb":{"@id":"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/#primaryimage","url":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/FlXmJchaMAAYVTp.jpg","contentUrl":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/FlXmJchaMAAYVTp.jpg","width":1200,"height":800,"caption":"The Las Vegas Strip. The American Gaming Association said the industry drove $329 billion in economic activity last year. (Image: Las Vegas Metropolitan Police Department)"},{"@type":"BreadcrumbList","@id":"https:\/\/www.casino.org\/news\/churchill-downs-mgm-could-lead-gaming-stock-gains\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"News","item":"https:\/\/www.casino.org\/news\/"},{"@type":"ListItem","position":2,"name":"Financial","item":"https:\/\/www.casino.org\/news\/financial\/"},{"@type":"ListItem","position":3,"name":"Churchill Downs, MGM Among Top Gaming Equity Ideas Ahead of Q2 Earnings"}]},{"@type":"WebSite","@id":"https:\/\/www.casino.org\/news\/#website","url":"https:\/\/www.casino.org\/news\/","name":"Casino.org","description":"Latest Casino and Gaming News","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.casino.org\/news\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85","name":"Todd Shriber","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.casino.org\/news\/#\/schema\/person\/image\/","url":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cropped-11-96x96.png","contentUrl":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cropped-11-96x96.png","caption":"Todd Shriber"},"description":"Todd Shriber is a senior news reporter covering gaming financials, casino business, stocks, and mergers and acquisitions for Casino.org. Todd got his start in financial markets as a reporter with Bloomberg News. Later, he became a trader at a Southern California-based long\/short hedge fund, where he specialized in the trading sector and international ETFs leading up to and during the financial crisis. He joined Casino.org in 2019. Currently, Todd analyzes, researches, and writes on ETFs for various web-based publications and financial services firms. Shriber has been featured and quoted in Barron's, CNBC.com, and The Wall Street Journal. His work can also be found on Benzinga, ETF Daily News, ETF Trends, MarketWatch, Fox Business, and Nasdaq.com. He currently resides in Las Vegas, where he enjoys golf and taking his black lab to the dog park. He's also an avid sports fan and likes to wager on college football and the NBA. You can also find him at the three-card poker and roulette table, even though he knows better. Contact Todd at todd.shriber@casino.org.","sameAs":["https:\/\/muckrack.com\/todd-shriber","https:\/\/www.linkedin.com\/in\/toddshriber\/","https:\/\/x.com\/etfgodfather"],"url":"https:\/\/www.casino.org\/news\/author\/todd-shriber\/"}]}},"_links":{"self":[{"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/posts\/280949"}],"collection":[{"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/users\/46"}],"replies":[{"embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/comments?post=280949"}],"version-history":[{"count":2,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/posts\/280949\/revisions"}],"predecessor-version":[{"id":280959,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/posts\/280949\/revisions\/280959"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/media\/259983"}],"wp:attachment":[{"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/media?parent=280949"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/categories?post=280949"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/tags?post=280949"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}