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On Thursday, Stifel analysts adjusted their outlook on Bally’s Corp (NYSE: BALY), reducing the price target from $17.00 to $14.00 while keeping a Hold rating on the stock. The stock, currently trading at $12.93, has experienced a significant decline of 41% over the past six months, according to InvestingPro data. The revision follows Bally’s reporting of a 9% miss in Q4 adjusted EBITDAR, marking their first financial quarter after the completion of the Casino (EPA:CASP) Queen and SG tender transactions. The shortfall was attributed to a decline in the C&R segment, somewhat mitigated by an unexpected positive impact from the divestiture of assets in Asia.
In a move that surprised market observers, Bally’s chose not to provide financial guidance for FY25 and additionally canceled their earnings call shortly before it was scheduled to begin. Stifel’s analysts suggest that this decision likely reflects the complexity and uncertainty in forecasting due to various factors at play, which could negatively affect investor sentiment given Bally’s already intricate narrative. InvestingPro data reveals concerning metrics, including a high debt-to-equity ratio of 21.8x and a current ratio of 0.56, indicating potential liquidity challenges.
The analysts noted that Bally’s has been experiencing significant trading volatility in the first trading week of the year, which they attribute to a combination of limited trading liquidity and high net leverage, approximately 7 times as of the end of 2025. This observation aligns with InvestingPro Tips, which highlight the company’s significant debt burden and high price volatility. Despite these challenges, Stifel maintains its Hold rating, believing that the potential for margin improvement and sum-of-the-parts (SOTP) valuation opportunities are balanced against the risks of high leverage and a lack of immediate catalysts for the company’s scrutinized casino-resort projects. For deeper insights into Bally’s financial health and valuation metrics, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
Adjustments were made to Stifel’s financial model for Bally’s, with forecasts for adjusted EBITDAR in 2025 and 2026 being lowered by 6% and 5%, respectively. The new price target of $14.00 is based on the same SOTP valuation multiples as before, while the company currently trades at an EV/EBITDA multiple of 22.7x. The analysts at Stifel concluded their commentary by emphasizing the unchanged multiples in their valuation approach, despite the lowered earnings estimates and price target for Bally’s Corp. Notably, InvestingPro analysis suggests the stock may be undervalued at current levels, with 8 additional exclusive ProTips available for subscribers seeking comprehensive analysis.
In other recent news, Bally’s Corporation reported fourth quarter revenue of $580.4 million for 2024, which fell short of analyst expectations of $610.63 million. The company’s Casinos & Resorts segment saw a revenue decline of 5.2% to $324.4 million, and International Interactive revenue decreased by 9.1% to $214.5 million. However, the North America Interactive segment experienced a 24.4% increase in revenue to $41.5 million, though it still recorded an Adjusted EBITDAR loss of $12.3 million. Challenges were noted at Bally’s temporary casino in Chicago, and visitation issues in Rhode Island impacted performance due to ongoing bridge construction. Despite these challenges, Bally’s reported a positive 11.3% year-over-year growth in its U.K. online revenue. The company also made progress on growth initiatives, breaking ground on its permanent Chicago casino and completing demolition at the former Tropicana site in Las Vegas. Additionally, Bally’s completed transactions with Standard General and The Queen Casino & Entertainment, adding four new properties to its portfolio. Management expressed optimism about these developments, suggesting they will support long-term growth as Bally’s expands its geographic presence.
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