Red Rock Resorts Stocks Surge After Analyst Upgrade, Promising Future Predicted


Red Rock Resorts (NASDAQ: RRR) stocks closed with a notable increase following an upgrade from a sell-side analyst. Located in Henderson, Nevada, Red Rock’s charming Green Valley Ranch is catching the attention of analysts who are increasingly bullish on the stock, citing a show of strength from Las Vegas locals.

In his communication to investors, experienced CBRE analyst John DeCree improved the rating on the gaming firm’s equity to “buy” from “hold”, while simultaneously unveiling a $53 price target. This price target implies an impressive 29% increase from the day’s closing price. DeCree’s calculations equate this to 11 times the firm’s projected adjusted 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA). Continuing growth in the Las Vegas locals segment lends credibility to Red Rock’s investment thesis.

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Direct interactions with Red Rock’s management have revealed robust growth in the Las Vegas locals market. A catalyst for acceleration, namely, the soon-to-be-opened Durango Casino & Resort scheduled for November 20, coupled with introduction of various long-term growth prospects across the Las Vegas Valley, presents a promising future, according to DeCree.

Southwest of Las Vegas, the proposed location for Durango Casino & Resort isn’t densely populated with gaming venues, giving Red Rock an additional edge. The new establishment will boast 73,000 square feet of gaming space, a sportsbook, 2,000 gaming machines and 40 table games.

Despite pressing economic concerns like excessive government expenditure, persisting high-inflation rates and record interest rates, the Las Vegas locals demographic remains solid. This serves as a boon for Red Rock, considering all its operational venues span the Las Vegas Valley. CBRE’s DeCree notes solid spending among Red Rock’s core customers, with no significant signs of a decline.

Looking beyond its prime venue in Summerlin and the Green Valley Ranch in Henderson, Red Rock operates several gaming properties throughout the Las Vegas area, under the Station brand name. Furthermore, the firm manages 10 Wildfire Casinos, including seven in Henderson.

The steady inflow of well-off retirees from states like California adds a positive dimension to Red Rock’s long-term prospects since they can make cash purchases of Las Vegas real estate. Coupling this with lower property taxes and absence of state income tax provides them the liberty to visit Red Rock-operated casinos, thereby providing a steady source of revenue for the company.

Catalysts underpinning the Red Rock investment thesis include the upcoming opening of Durango, enhancements at Green Valley Ranch, and continued growth in the Las Vegas locals market. The fact that the stock is now attractively valued, is off 20% from its 52-week ensuring a bear market with a 2.44% dividend yield, and has resources to sustain this payout, are other notable aspects. In addition, Red Rock owns a large swath of real estate, including all the property on which its casinos and resorts are situated, along with several acres of undeveloped land.

Here at the West Island Blog, we see a prospering future for Red Rock Resorts. Investors seeking to capitalize on the many opportunities present in the gambling industry need look no further. But aside from brick-and-mortar casinos, there’s a whole digital world full of opportunity for Canadians who enjoy the thrill of the game. We understand that not everyone is familiar with these online casinos. Luckily, we’ve compiled a list of the top online casinos for this month to help you navigate the digital casino landscape safely and successfully. With a range of games and potential winnings, online casinos can bring the excitement right to your home. So why not give it a shot today?