Morgan Stanley again adjusts its Fed forecast, now sees 4 cuts in 2026
On Friday, Citizens JMP made an adjustment to its price target for Century Casinos (NASDAQ:CNTY), reducing it from $5.00 to $4.00, while still maintaining a Market Outperform rating. The stock, currently trading at $1.91, has experienced significant pressure, falling over 41% year-to-date and 26% in the past week alone. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value model, despite challenging market conditions. Analysts at the firm have articulated a cautiously optimistic view on the company’s outlook, despite the recent performance of its shares in the market.
The firm’s analysts believe that the company’s cautious guidance is a reflection of the current macroeconomic uncertainties. InvestingPro data reveals the company operates with a significant debt burden and is quickly burning through cash, with negative free cash flow of $67 million in the last twelve months. However, they also note that the early part of the year provided a more positive environment than what is currently priced into the stock. This perspective comes after a January affected by adverse weather conditions, followed by a strong start to February, a weather-impacted latter half of the same month, and a rebound in the first half of March.
Century Casinos’ performance in the first quarter of 2025 has been influenced by these weather-related disruptions, but analysts expect improvements as the weather becomes more favorable in the spring. The anticipation is that better conditions will support the company in delivering improved results after a challenging first quarter.
Additionally, the opening of a new land-based facility in Caruthersville, Missouri, in November 2024 is seen as a positive development. This event marked the completion of a significant capital expenditure cycle across Century Casinos’ U.S. operations. Analysts predict that the company should begin to see returns on its newly renovated assets with the advent of better weather, coupled with the advantage of easier year-over-year comparisons and an enhanced cost structure.
In other recent news, Century Casinos reported disappointing fourth-quarter 2024 results, missing both earnings per share (EPS) and revenue expectations. The company posted an EPS of -2.11, significantly below the forecasted -0.46, while revenue reached $137.8 million, falling short of the anticipated $142.62 million. Analysts noted that Century Casinos experienced a 4% year-over-year decline in revenue and a 17% drop in adjusted EBITDA. The company’s U.S. operations also showed declines in revenue and EBITDA, reflecting broader industry challenges. Despite these setbacks, Century Casinos is focusing on operational efficiency and exploring potential asset divestments. The company highlighted the successful opening of a new facility in Caruthersville, Missouri, which has shown promising initial results. Looking forward, Century Casinos projects improvements in EBITDA and cash flow for 2025 and is preparing for a sports betting launch in Missouri.
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