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Investing.com - Stifel maintained its Hold rating and $92.00 price target on Monarch Casino (EPA:CASP) & Resort (NASDAQ:MCRI) following the company’s strong second-quarter results.
Monarch Casino reported a 15% beat on adjusted EBITDA for the second quarter, significantly exceeding analyst expectations despite some anticipation of improving regional trends in the gaming sector. The company maintains impressive gross profit margins of 66.52% and boasts a "GREAT" financial health score according to InvestingPro analysis.
Stifel attributed the surprising performance primarily to stronger-than-expected initial demand for renovated rooms at the company’s Atlantis (WA:ATSP) property, particularly among high-worth players.
The research firm described Monarch as "best-in-class in regional gaming" citing favorable population and job growth fundamentals, stable competitive supply, high-end positioning, and continued potential for VIP customer development in Black Hawk.
Stifel increased its 2025 and 2026 adjusted EBITDA estimates by 5% but maintained its Hold rating, indicating it would consider an upgrade following either a stock pullback or improved prospects for merger and acquisition activity.
In other recent news, Monarch Casino & Resort reported impressive second-quarter earnings and revenue results that surpassed analyst expectations. The company achieved adjusted earnings per share of $1.44, which exceeded the anticipated $1.19, while revenue reached $136.91 million, surpassing the consensus estimate of $129.75 million. This performance was largely driven by a 12.1% increase in casino revenue compared to the previous year. Additionally, Monarch’s adjusted EBITDA rose by 16.8% year-over-year to $51.3 million, with an expanded EBITDA margin of 37.5%.
Wells Fargo (NYSE:WFC) upgraded Monarch Casino’s stock from Underweight to Equal Weight, citing strong execution and consistent performance. The investment bank increased its price target to $89.00 and raised its fiscal year 2025-2027 EBITDA estimates by 5-6%. Wells Fargo noted Monarch’s ability to sustain and grow EBITDA margins, projecting sustained 35% adjusted EBITDA margins for the coming years. Furthermore, Monarch completed a $100 million redesign of hotel rooms at its Atlantis property, enhancing its market share in Reno. Monarch also declared a quarterly cash dividend of $0.30 per share, reflecting its strong financial position.
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