By Christiana Sciaudone
Investing.com — Churchill Downs (NASDAQ:) got a buy rating from Macquarie as the firm initiates coverage.
Shares were little changed.
The firm placed a price target of $254 on the stock, a Street-high according to data complied by Investing.com.
“Churchill Downs owns one of the most iconic assets in the United States, Churchill Downs Racetrack, home to the Kentucky Derby, the longest running sporting event in the country. The irreplaceable asset, which has historically generated ~25% of company EBITDA in a single day, has few true comps and we believe it should garner a premium valuation multiple even to a comp set of luxury and unique brands across the globe,” the firm wrote in a note.
Churchill Downs is a racing, online wagering and gaming entertainment company, and owns and operates three pari-mutuel gaming entertainment venues in Kentucky, as well as TwinSpires, one of the largest online horse race wagering, online sportsbook and iGaming platforms in the U.S. The company also has about 11,000 slot machines and video lottery terminals and 200 table games in eight states.
Sales have recovered steadily throughout the pandemic after an initial hit.
“Separately, an underappreciated part of the investment story, in our view, is the growth through the historical racing machines (HRM) in KY,” the firm wrote in a note.