Daniel Politzer, an analyst from Wells Fargo, maintained the Buy rating on Churchill Downs (CHDN – Research Report). The associated price target was lowered to $158.00.
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Daniel Politzer has given his Buy rating due to a combination of factors including Churchill Downs’ ambitious $900 million Derby project pipeline, which is expected to significantly enhance EBITDA over the coming years. The projects, slated to be completed from 2025 to 2028, are anticipated to yield a substantial return, potentially boosting the company’s financial performance and offering an attractive entry point for investors.
Despite some concerns about the renewed capital expenditure cycle, Politzer notes that Churchill Downs has historically demonstrated strong returns on its Derby investments, suggesting confidence in the management’s capital deployment strategy. Furthermore, the company’s underperformance relative to its gaming peers is seen as a temporary setback due to external factors rather than fundamental issues, with expectations for sentiment to improve as new projects ramp up and policy fears diminish.
In another report released yesterday, JMP Securities also reiterated a Buy rating on the stock with a $162.00 price target.