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On Thursday, Churchill Downs (NASDAQ:CHDN), currently trading at $105.04, received a reaffirmation of its Market Outperform rating and a steady price target of $157.00 from Citizens JMP. The company’s first-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA) were reported at $245 million, aligning with both the consensus and Citizens JMP’s own estimates. According to InvestingPro data, the company’s trailing twelve-month EBITDA stands at $886.9 million, with a market capitalization of $7.72 billion. Despite this, the company faced challenges in its Gaming and Live and Historical Racing segments, which saw declines of 1% and 2% respectively compared to consensus expectations. These segments were notably affected by adverse weather conditions and an unfavorable calendar.
Churchill Downs’ performance was also influenced by persistent softness in the lower-end consumer market. However, there was a bright spot in the company’s operations. The Terre Haute venue, having completed its first year, demonstrated a robust 16% return rate, which stands out in the gaming industry.
The company’s Wagering Services and Solutions division, formerly known as TwinSpires, emerged as a positive highlight for the quarter. This segment’s EBITDA exceeded expectations by 9%, offering a counterbalance to the areas where performance did not meet consensus.
Citizens JMP’s analysis of Churchill Downs’ quarterly results points to a mixed outcome, with specific segments underperforming due to external factors, while others show promising growth and profitability. The maintained price target of $157.00 reflects confidence in the company’s overall business trajectory despite the short-term headwinds faced in the first quarter of 2025.
In other recent news, Churchill Downs Incorporated reported first-quarter earnings that did not meet analyst expectations. The company posted adjusted earnings per share of $1.02, falling short of the consensus estimate of $1.11. Revenue for the quarter was $642.6 million, which was a 9% increase year-over-year but still below analyst projections of $649.69 million. Despite the earnings miss, Churchill Downs achieved record quarterly revenue, driven by growth in its Live and Historical Racing segment. The Virginia historical racing machine venues contributed an $18.2 million revenue increase, while Kentucky HRM revenue rose by $8.9 million. Additionally, the Gaming segment revenue increased by $24 million to $267.2 million, thanks in part to the opening of Terre Haute Casino (EPA:CASP) Resort. However, declines at other properties due to regional gaming weakness and increased competition partially offset this growth. Churchill Downs continued its capital return program, repurchasing $89.4 million of shares in the first quarter, and the board approved a new $500 million share repurchase authorization.
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