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Investing.com - Wells Fargo (NYSE:WFC) has reduced its price target on Golden Entertainment (NASDAQ:GDEN) to $34.00 from $36.00 while maintaining an Overweight rating on the stock. According to InvestingPro data, the stock has declined over 20% year-to-date and currently appears undervalued based on comprehensive Fair Value analysis.
The price target adjustment follows Golden Entertainment’s second-quarter EBITDA of $38 million, which aligned with consensus expectations as strong performance in the company’s Locals segment offset slower visitation at the STRAT property. The company maintains a healthy gross profit margin of 54% and generated $133.6M in EBITDA over the last twelve months, as reported by InvestingPro.
Wells Fargo noted that challenging operating conditions at the STRAT and low hold in Laughlin negatively impacted EBITDA by $1.5 million during the quarter, though this was balanced by improvements in the company’s cost structure.
The firm expects the current summer slowdown on the Las Vegas Strip to continue through July and August, with stabilization anticipated in the fourth quarter of 2026 as the convention calendar improves and the company faces easier year-over-year comparisons.
Wells Fargo remains constructive on Golden Entertainment, citing reasonable valuation, expected growth in Laughlin, Locals, and Taverns segments in 2026, benefits from recent legislation including accelerated depreciation and tax exemptions on tips, and the potential for additional share repurchases. InvestingPro analysis reveals management’s aggressive share buyback program and identifies 10+ additional key insights available to subscribers, including detailed valuation metrics and growth forecasts.
In other recent news, Golden Entertainment reported its second-quarter earnings for 2025, exceeding expectations with an earnings per share (EPS) of $0.17, which was higher than the forecasted $0.16. Despite this positive EPS surprise, the company experienced a slight revenue shortfall, recording $163.6 million in revenue compared to the anticipated $167.43 million. The casino operator’s revenue and EBITDA for the quarter showed year-over-year declines of 2% and 7%, respectively, with EBITDA at $38.4 million. These figures were slightly below consensus estimates. Macquarie responded to these mixed results by lowering its price target for Golden Entertainment to $37.00, while maintaining an Outperform rating. The firm noted that when adjusting for low table performance in Laughlin, EBITDA would have exceeded expectations by 2%. These developments provide investors with a nuanced view of the company’s current financial performance.
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