Shares of Red John Rock Resorts (NASDAQ: RRR) closed modestly higher today after the stock landed an upgrade from a sell-side analyst.
In a annotation to clients today, CBRE analyst Saint John DeCree lifted his rating on the gaming equity to “buy” from “hold” piece unveiling a $53 toll target. That implies upside of upside of 29% from today’s closing terms and is the combining weight of 11x the operator’s estimated familiarised 2024 earnings before interest, taxes, wear and tear and amortization (EBITDA). Strength in the Las Vegas locals segment continues underpinning the Red River John Rock investment thesis.
We latterly met with RRR management and see continued strength inwards the Las Vegas Locals market; a Florida key near-term accelerator with Victoria de Durango Casino & Resort scheduled to open on Nov 20; and a rich line of long-term maturation prospects crosswise the Las Vegas Valley,” wrote DeCree.
Red Rock believes Durango Casino & Resort will live successful because it’s in unity of the few areas — southwest — of Las Vegas that isn’t thickly populated with gaming venues. The gambling casino will lineament 73,000 straight feet of gaming space, a sportsbook, 2,000 gaming machines, and 40 tabularise games.
Las Vegas Locals Proving Reliable
While signs are mounting that profligate federal government spending, obdurately heights inflation and the highest involvement rates in deuce decades are pressuring the economy, the Las Vegas locals demographic is proving resilient.
That’s just word for Red River John Rock because all of the operator’s venues are placed inward the Las Vegas Valley. CBRE’s DeCree observed that spell the research unshakable expected macroeconomic headwinds to lede to some degradation inward the locals market, that hasn’t happened. Rather, disbursement remains whole among Red River Rock’s magnetic core customers with no material signs of softness.
In increase to its namesake locale in Summerlin and the William Green Valley Ranch in Henderson, Red River Rock operates multiple gaming properties under the Station brand throughout the Las Vegas area. The fellowship also runs 10 Wildfire casinos, including seven inward Henderson, according to its website.
An influx of affluent retirees from other states, namely neighboring California, bolsters the long-term instance for Red River John Rock shares because many of those consumers put up make up cash in for Las Vegas real estate. Combine the excretion of mortgage obligations with lower belongings taxes and no res publica income taxation inwards Nevada, and they experience the discretional cash in with which to luxuriate in visits to Red Rock-operated casinos.
Catalysts Abound for Red River Rock Stock
In gain to the upcoming debut of Durango, enhancements at William Green Valley Ranch and the on-going vibrancy in the Las Vegas locals market, there are other catalysts backstopping the Red River John Rock investiture thesis.
Those include the power point that with the shares sour 20% from their 52-week — the definition of a take over securities industry — the caudex is at present attractively valued. It also comes with a 2.44% dividend give in and the resources to back up that payout.
Additionally, Red River Rock owns a treasure trove of tangible estate. It owns all the prop on which its cassino hotels resorts and hundreds of acres of undeveloped land. In aggregate, the operator’s tangible estate holdings are likely worth more than its current market place capitalization of $2.44 billion, indicating those assets aren’t adequately reflected inward the part price.
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