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Investing.com - Texas Capital Securities downgraded Golden Entertainment (NASDAQ:GDEN) from Buy to Hold and reduced its price target to $30.00 from $39.00 on Thursday. The stock is currently trading at $28.98, with a notably high P/E ratio of 54.68, indicating investors are paying a premium for the company’s earnings.
The downgrade follows Golden Entertainment’s announcement that it entered into a definitive agreement to sell its operating assets to Blake Sartini, the company’s founder, chairman and CEO, along with seven real estate assets to gaming REIT VICI.
The total consideration amounts to $30 per share, representing a 41% premium to Wednesday’s closing price and approximately 35% higher than its average trading price since September 25.
Texas Capital Securities noted that while the firm believes Golden Entertainment’s asset value and operations are worth more than $30 per share, there are only a few potential alternative buyers who would have interest near or above the Sartini/VICI consideration, and the stock price premium "screens fair."
The research firm suggested the transaction should boost sentiment on land-based casino names with a mix of owned land assets, specifically mentioning Caesars Entertainment (NASDAQ:CZR), Red Rock Resorts (NASDAQ:RRR), Boyd Gaming (NYSE:BYD), Full House Resorts (NASDAQ:FLL), and Wynn Resorts (NASDAQ:WYNN), among others.
In other recent news, Golden Entertainment has announced a significant transaction involving the sale of its operating assets. VICI Properties will acquire seven of Golden’s casino real estate assets in a $1.16 billion deal, structured as a sale-leaseback transaction. This transaction includes notable properties such as The STRAT Hotel and two Arizona Charlie’s locations, among others. As part of the agreement, Golden stockholders will receive a combination of VICI common stock and cash, totaling $30 per share, which is a 41% premium to Golden’s closing price on November 5, 2025.
In terms of financial performance, Golden Entertainment reported a second-quarter revenue of $163 million and EBITDA of $38.4 million, both showing year-over-year declines. Despite these declines, the company’s EBITDA met consensus expectations, supported by strong performance in the Locals segment. Analyst firms such as Citizens JMP, Wells Fargo, and Macquarie have recently adjusted their price targets for Golden Entertainment, with targets now ranging from $34 to $37 while maintaining positive ratings. These developments reflect the mixed results and strategic decisions currently shaping Golden Entertainment’s market presence.
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