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Investing.com - Churchill Downs (NASDAQ:CHDN) stock, currently trading at $105.13 with a market capitalization of $7.59 billion, rose Wednesday after Stifel reiterated its Buy rating and $133.00 price target following the company’s acquisition announcement. According to InvestingPro, the company boasts a perfect Piotroski Score of 9, indicating strong financial health.
Churchill Downs revealed Tuesday that it has agreed to acquire a 90% equity stake in the Casino (EPA:CASP) Salem project located in southern New Hampshire. The company will pay $180 million in cash for the stake, funding the transaction through its existing revolving credit facility.
The Casino Salem project was originally developed as a $200 million multi-phase historical horse racing (HHR) development partnership between Cordish and local developers Joe Faro and Sal Lupoli. Phase one of the project opened on July 9, featuring approximately 100 historical racing machines and 13 table games.
Under the terms of the deal, developers Joe Faro and Sal Lupoli will retain a 10% ownership stake in the project and will assist with the phase two development. The transaction is expected to close in the third quarter of 2025.
Stifel analyst Jeffrey Stantial maintained the firm’s Buy rating on Churchill Downs following the announcement, keeping the price target unchanged at $133.00. Trading at a P/E ratio of 18.35, the stock shows attractive valuation metrics relative to its growth potential. Discover more detailed analysis and valuation insights with InvestingPro’s comprehensive research report.
In other recent news, Churchill Downs is preparing to announce its second-quarter earnings, with analysts from Stifel adjusting their projections. Stifel has raised its price target to $133, maintaining a Buy rating, but has slightly lowered its estimated adjusted EBITDA due to developments at The Rose and the removal of historical horse racing machines in Louisiana. JMP Securities has reiterated a Market Outperform rating with a price target of $138, noting the importance of the TwinSpires platform to Churchill Downs’ revenue. Meanwhile, JPMorgan has initiated coverage with an overweight rating and a $116 price target, suggesting that market sentiment may be overly negative. The firm sees the company’s shift toward returning capital to shareholders as a positive development.
Stifel analysts have also reaffirmed their Buy rating, maintaining a $130 price target, following discussions with Churchill Downs’ management. They express confidence in the company’s strategic outlook, particularly regarding the Kentucky Derby and The Rose Dumfries. JMP analysts have adjusted their price target from $144 to $138, acknowledging the impact of removing historical racing machines in Louisiana on EBITDA. However, they note that this move does not indicate broader legal issues for the company. Investors are closely watching Churchill Downs’ strategies to mitigate these impacts, with the upcoming earnings report expected to provide further insights.
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