Backed by a robust financial standing, Golden Entertainment, registered on NASDAQ as GDEN, is potentially on the hunt for strategic acquisitions. This assumption comes after Golden’s recent meeting with Deutsche Bank analyst Carlo Santarelli at the Global Gaming Expo held in Las Vegas.
The analyst retained a “buy” rating for the Strat operator, with a price target set at $46, a prognosis implying a 35% potential price increase from its existing levels. A noticeable shift in tone towards mergers and acquisitions was picked up on by Santarelli, with Golden management hinting that its strong balance sheet makes such progress viable.
As the financial quarter two concluded, Golden possessed an impressive $166 million in cash, versus an outstanding liability of $735 million. However, earnings from the sale of Rocky Gap Casino Resort, which totalled $260 million earlier this year, went towards reducing this debt, adjustably positioning Golden for future consolidation possibilities.
Excluding the Rocky Gap from its assets, all of Golden’s casinos are nestled in Nevada. Innovative deal-making strategies may spring up in major gaming markets such as Las Vegas and Reno/Lake Tahoe. The absence of Golden in the thriving and transforming casino sector of Reno/Tahoe region presents an opportunity for the company to explore further merger and acquisitions.
In the heart of Las Vegas, Golden’s mainstay property is the Strat casino resort. The famed establishment shows signs of progress, with room enhancements and the upcoming Las Vegas Grand Prix and the Super Bowl. According to Santarelli, the much-anticipated launch of Atomic Golf, a golf-based attraction on the north end of the resort, is expected to be a significant revenue driver.
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