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Gambling Stock Roundup: Casinos' Reopening Plans, Q1 Earnings Releases

Zacks Equity Research

The Gaming industry rallied 1.8% last week, compared with the S&P 500’s growth of 0.2% thanks to the industry participants’ casino reopening plans.

Recap of Last Week’s Most Important Stories

MGM Resorts to Reopen Mississippi Casinos

Following the closure of properties in mid-March due to the COVID-19 outbreak, MGM Resorts International MGM recently announced that it will reopen two properties in Mississippi. It also stated that these will be the first of the company's U.S. properties to reopen.

However, upon reopening, these properties are likely to operate with limited amenities and capacity restrictions in accordance with Mississippi gaming commission guidelines. Notably, a 50% capacity restriction will be enforced along with social distancing protocols across table games and slot machines. It also emphasized on the "Seven-Point Safety Plan" initiative to ensure the safety and well-being of guests and employees.

MGM Resorts currently has a Zacks Rank #4 (Sell).

Boyd Gaming Casinos Reopening Plan

Boyd Gaming Corporation BYD recently announced that it will reopen seven properties across Louisiana and Mississippi, marking its first reopening of properties.

However, upon reopening, these are likely to operate with limited amenities and capacity restrictions in accordance with state and local guidelines aimed at mitigating and minimizing the virus spread. Notably, social distancing requirements will also be in place across casino floors and restaurants.

Boyd Gaming has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Penn National Resumes Operations at Louisiana

Penn National Gaming, Inc. PENN reopened five casino properties in Louisiana, representing 25% of its portfolio of regional casino assets. Moreover, the company recently announced that it will reopen five properties in Mississippi. Notably, the company has initiated property-specific social distancing and safety protocols to ensure well-being of guests and employees.

Penn National Gaming currently has a Zacks Rank #4.

Red Rock Resorts Q1 Earnings Lag Estimates, Fall Y/Y

Red Rock Resorts, Inc. RRR reported first-quarter 2020 results, wherein earnings and revenues not only missed the Zacks Consensus Estimate but also declined on a year-over-year basis.

The Zacks Rank #4 company reported adjusted loss of 11 cents per share, which missed the Zacks Consensus Estimate of earnings 13 cents. Moreover, the reported figure declined from the year-ago quarter’s earnings of 16 cents.

Revenues during the quarter totaled $377.4 million, which missed the consensus mark of $438 million by 13.9%. Further, the top line decreased 15.6% on year-over-year basis. The decline can primarily be attributed to the temporary closure of all of properties owing to the coronavirus outbreak.

In a bid to strengthen its liquidity position and save itself from a possible recession, Red Rock Resorts suspended quarterly dividends for the remainder of 2020.

Century Casinos Q1 Earnings & Revenues Miss Estimates

Century Casinos, Inc. CNTY reported first-quarter 2020 results, with earnings and revenues missing the Zacks Consensus Estimate. Notably, the bottom line lagged the consensus estimate for the sixth straight quarter.

Results in the quarter were impacted by the coronavirus pandemic. The company closed all of its casinos, hotels and other facilities between Mar 14 and Mar 17.

The Zacks Rank #4 company reported adjusted loss per share of $1.55, which was wider than the Zacks Consensus Estimate of a loss of 5 cents. In the prior-year quarter, the company had reported adjusted earnings per share of 4 cents.

Revenues in the first quarter totaled $87.7 million, which missed the consensus mark of $95 million. However, revenues surged 92% year over year primarily owing to the acquisition of Mountaineer Casino, Racetrack & Resort, Century Casino Cape Girardeau and Century Casino Caruthersville (the "Acquired Casinos") in December 2019.

Price Performance 

The following table shows the price movement of the major gambling stocks in the last week and the last six months:

In the past five trading sessions, shares of Penn National Gaming and Red Rock Resorts have gained the most.

Moreover, shares of Penn National Gaming have gained the most in the past six months.

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MGM Resorts International (MGM) : Free Stock Analysis Report
 
Penn National Gaming, Inc. (PENN) : Free Stock Analysis Report
 
Boyd Gaming Corporation (BYD) : Free Stock Analysis Report
 
Century Casinos, Inc. (CNTY) : Free Stock Analysis Report
 
Red Rock Resorts, Inc. (RRR) : Free Stock Analysis Report
 
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