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On Wednesday, Mizuho (NYSE:MFG) Securities adjusted its financial outlook for Churchill Downs Incorporated (NASDAQ:CHDN), reducing the price target to $148 from the previous $151 while affirming an Outperform rating on the company’s shares. The revision was prompted by updated fourth-quarter projections and expectations for the year 2025. Currently trading at $121.58, the stock maintains a strong "Buy" consensus among analysts, with targets ranging from $148 to $172. InvestingPro analysis suggests the stock may be undervalued based on its proprietary Fair Value model.
The firm’s analysts have revised their fourth-quarter 2024 adjusted EBITDA estimate down to $232.4 million from $239.4 million, which contrasts with the consensus figure of $234.8 million on the Street. Additionally, the 2025 adjusted EBITDA forecast has been lowered to $1.233 billion from the previous estimate of $1.252 billion, against a Street consensus of $1.263.3 billion. The company’s last twelve months EBITDA stands at $875.8 million, with revenue growing at 12.2% year-over-year to $2.67 billion.
The analysts cited a more conservative stance on the company’s operations in Virginia, influenced by recent performance trends. Additionally, they noted that trends in the District of Columbia played a lesser role in the revision. The fourth quarter was reportedly affected by factors such as heightened marketing costs during the election period and construction delays, particularly at the Rose property.
Despite these adjustments, Mizuho Securities has maintained its positive Outperform rating on Churchill Downs stock. The analysts believe that, even after accounting for the mentioned factors, sequential trends in Virginia appear to be weaker than previously anticipated.
Churchill Downs Incorporated, known for its flagship Kentucky Derby, has seen its financial forecasts adjusted as market analysts at Mizuho Securities take a more cautious view of its near-term prospects in specific regional markets. The updated price target reflects the latest expectations based on the company’s performance and market conditions. InvestingPro data reveals the company maintains a "GOOD" overall financial health score, with particularly strong marks in profitability. Notably, the company has maintained dividend payments for 51 consecutive years, demonstrating remarkable financial stability. For deeper insights into CHDN’s financial health and future prospects, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Churchill Downs Incorporated has successfully negotiated a lower interest rate on its Term Loan B-1, as disclosed in a recent SEC filing. This amendment to the company’s senior secured credit agreement aims to optimize borrowing costs, reflecting Churchill Downs’ ongoing efforts to manage its capital structure efficiently. JPMorgan Chase (NYSE:JPM) Bank, N.A., serves as the administrative agent and fronting lender for the agreement, which is supported by the company’s subsidiaries and secured by substantial assets.
In analyst updates, Truist Securities maintains a Buy rating on Churchill Downs, citing strong potential at The Rose Gaming Resort in Dumfries, VA. The firm’s positive outlook is based on Churchill Downs’ reputation for organic growth and potential for strategic mergers and acquisitions. Similarly, Stifel reaffirms its Buy rating for Churchill Downs, highlighting the stock as a top pick with upside bias to 2025/26 consensus. The firm’s optimism is based on the company’s potential for upward adjustments to consensus estimates and opportunities for capital expenditures and possible expansion into new markets.
These are recent developments emphasizing Churchill Downs’ strategic financial management and growth prospects, as well as the confidence expressed by analysts from Truist Securities and Stifel. The company continues to focus on optimizing its financial structure to support its ongoing operations and future growth initiatives within the gaming and racing industry.
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