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On Wednesday, Stifel analysts maintained a Buy rating for Century Casinos (NASDAQ:CNTY) shares with a consistent price target of $5.00. Currently trading at $3.03, the stock sits well below its 52-week high of $5.09. According to InvestingPro data, the company’s market capitalization stands at $93 million, with analyst targets ranging from $5 to $8 per share. The firm made adjustments to its financial model in anticipation of the company’s fourth-quarter 2024 earnings report, which is expected to be released in mid-March. These adjustments were made to better align with the latest state-reported Gross Gaming Revenue (GGR) data.
The analysts noted that they have lowered their margin assumptions for both the fourth quarter of 2024 and the first half of 2025. This change primarily accounts for the disruptions and a slower-than-expected margin ramp at the Caruthersville expansion project, as well as an error in modeling seasonal trends in Reno. InvestingPro analysis reveals that Century Casinos operates with a significant debt burden, with a debt-to-equity ratio of nearly 18x and total debt exceeding $1 billion as of the latest quarter. As a result of these revisions, Stifel’s estimated Adjusted EBITDAR for the fourth quarter now aligns with updated Street estimates that followed the third-quarter results.
Despite the downward adjustment in margin expectations, Stifel’s stance on Century Casinos remains positive. The analysts pointed out that the market may have already priced in the margin headwinds, as evidenced by the stock’s 32% decline over the past two months. They believe that the stock has the potential to recover to over $5 per share, particularly noting that Century Casinos is trading at an approximately 15% yield on the firm’s largely unchanged 2026 Free Cash Flow estimates, compared to the peer average of around 10%.
The report further suggests that a reversion to the mean in terms of multiples will likely depend on Century Casinos providing evidence of normalized earnings power. Stifel now sees this as a potential catalyst for the second half of 2025. The firm’s confidence in Century Casinos’ "normalized" earnings power is supported by due diligence on the Missouri project. With these factors in mind, Stifel reaffirms its Buy rating and $5 price target for Century Casinos stock. For deeper insights into CNTY’s financial health, valuation metrics, and 8 additional key ProTips, explore the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Century Casinos has seen several significant developments. JMP Securities and Stifel both maintained a positive outlook on the company, with JMP Securities maintaining its Market Outperform rating and Stifel keeping its Buy rating on the company’s stock. Both firms have set a price target of $5.00 for Century Casinos’ shares. JMP Securities highlighted Century Casinos as a potential merger or acquisition target, while Stifel cited the success of the Caruthersville expansion and stabilization of the Nugget casino’s profit margins as positive indicators.
Century Casinos reported a slight decrease in net revenue and adjusted EBITDAR in Q3 2024, with net revenue at $156 million, a 3% year-over-year decrease. Despite this, the company expressed optimism for future growth, primarily due to the reopening of their Polish casino and the launch of a new establishment in Missouri. The company is also considering stock buybacks, with an existing resolution allowing for $15 million in share repurchases.
Finally, interest in purchasing Century Casinos’ non-core assets in Poland has seen a resurgence following the successful re-licensing process. These recent developments highlight the ongoing activities of Century Casinos.
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