On Friday, Mizuho Securities adjusted its price target for Churchill Downs (NASDAQ:CHDN) shares, a racing, gaming, and betting entertainment company, to $143.00, up from the previously set $142.00. The firm maintains its 'Buy' rating.
The revision followed Churchill Downs' report of higher-than-anticipated revenue and EBITDA for the recent quarter. The company's revenue came in at $591 million, surpassing Mizuho's projection of $548 million, and EBITDA reached $242.5 million, exceeding the firm's estimate of $214 million.
The positive financial results prompted Mizuho to continue its favorable outlook on the stock, citing the company's development pipeline and growing incremental margins as key drivers.
Churchill Downs showed particularly strong performance in its Live and Historical Racing (L&HR) segment, reporting $100.8 million in revenue. This figure not only exceeded Mizuho's estimate of $86.3 million but also outperformed the consensus estimate of $89.6 million on Wall Street.
Mizuho's analysis highlighted four main takeaways from Churchill Downs' financial outcomes, underscoring the company's overall better-than-expected results. The firm's maintained 'Buy' rating reflects confidence in Churchill Downs' future performance and its potential to exceed estimates based on its current trajectory.
InvestingPro Insights
Churchill Downs (NASDAQ:CHDN) has been demonstrating a robust financial performance, which is reflected in the real-time data from InvestingPro. With a market capitalization of $9.5 billion and a Price/Earnings (P/E) ratio of 28.71, the company shows significant valuation. Adjusted for the last twelve months as of Q1 2024, the P/E ratio stands at a slightly lower 25.84, indicating a positive earnings perspective as analysts have revised their earnings upwards for the upcoming period, an InvestingPro Tip worth noting.
The company's revenue growth has also been impressive, with a 24.33% increase over the last twelve months as of Q1 2024, and a quarterly growth of 5.61% in Q1 2024. This aligns with the strong performance in its Live and Historical Racing segment highlighted by Mizuho Securities. Furthermore, Churchill Downs' return on assets is at 5.13%, which, along with a 7.0% dividend growth in the same period, showcases the company's ability to generate profits and return value to shareholders. Notably, Churchill Downs has raised its dividend for 13 consecutive years, a testament to its financial health and commitment to shareholders, as pointed out by another InvestingPro Tip.
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