Bally’s (NYSE: BALY) gaming equity has been lagging in the past months among broader gaming stock. Investors are also concerned about the ability of the firm to digest its recent acquisitions. However, one analyst sees an opportunity for investors to embrace the newly acquired status.
Stifel analyst Jeffrey Stantial predicts that the Rhode Island-based shares will rally by 33 percent to reach $81 from the current $75. Stantial further adds that the stock could ascend further to $ 122, double the current price.
Among its acquisition deal include the acquisition of online gaming operator Gamesys for $2.7 billion. The acquisition has been applauded on Wall Street, and Bally will seek additional financing, further heightening investors’ worries.
Back in 2020, Bally was a dormant regional casino operator with venues in few states. That is rapidly changing. Bally’s acquisitions have bolstered its sports wagering footprint. That does not include pending purchases of land-based casinos that will significantly exposure the firm. In total, Bally will be operating in 14 states.
In the past, Bally’s acquisitions largely boosted its stock. However, Bally’s recent rapid deal-making is giving investors a pause. However, Stantial believes that Bally brick and mortar business will rate higher, and the management will soon close the remaining acquisitions.
Bally’s land-based casino business is valued at $2.8 billion, domestic iGaming/sports betting is worth $1 billion. Add the $3.1 billion Gamesys acquisition, the enterprise value add to $7 billion.
Stantial further notes that Bally’s iGaming and sports betting will imply significant discounts to peers. Bally’s stock will benefit when the gap narrows with its closest rival, Wynn Interactive.